Premier, Royal Olympic discuss merger

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NEW YORK -- Officials of Premier Cruises and Royal Olympic Cruises met within the past two weeks to discuss a possible merger, Travel Weekly learned.

According to a confidential memo obtained by Travel Weekly, Premier Cruises president Bruce Nierenberg informally proposed to Royal Olympic board member Aleco Keusseoglou at a meeting here that the two lines join forces for reasons including cost savings, increased buying power, better yields and additional deployment and marketing opportunities. Together, the companies operate 13 ships.

Nierenberg insisted that his discussions with Keusseoglou amounted to nothing more than a get-together by two old friends, although the memo suggested the executives bring their ideas to major shareholders of their firms. A followup meeting took place in Europe, according to sources.

"There is no merger pending, no transaction, nothing," an angry Nierenberg said when asked to comment on the memo. He said Premier has also had discussions "with other people."

"I had a meeting with [Royal Olympic] like I do all the time," Nierenberg said.

But he later added that a merger between Premier and Athens-based Royal Olympic, which have both had disappointing financial results, "makes a lot of sense."

"A merger would help the trade. A merger would make a better company," Nierenberg said.

Keusseoglou said his discussions with Nierenberg were only "a preliminary exchange of ideas." He said Royal Olympic is not talking to anyone else, but that the company is "on the lookout to expand."

Meanwhile, Premier's corporate credit and senior unsecured debt ratings were lowered to "D" from triple-"C" by Standard & Poor's. S&P said the line "did not make the March 15 interest payment on its senior notes."

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