NEW YORK -- Carnival Corp.'s quest for NCL Holding is at an end
after Singapore-based Star Cruises doubled its stake in the
Oslo-based line Dec. 16, buying 46.5 million shares to acquire
39.3% of NCL only a day after acquiring 51.4 million shares, or
about 20.6%.
Star bought its latest NCL stake for 35 Norwegian kroner per
share ($4.35), effectively besting Carnival's 30 kroner per share
bid, which NCL's board had rejected.
"The Star purchase demonstrates the Carnival price was too low,"
said Kristian Siem, NCL's chairman. Carnival's $1.7 billion
unsolicited tender offer had sought NCL for $935 million in cash
with an assumption of $800 million in debt.
Star's purchase means Carnival will "allow [the company's]
tender to NCL shareholders to expire" on the original deadline of
Dec. 22 "without any amendment or waiver of any conditions,"
according to a statement from Micky Arison, Carnival's
chairman.
"We always believed the [Carnival bid] was fair for both
parties," he said. "Based on information available to us, prices in
excess of [Carnival's 30 kroner per-share bid] price would not
create value for Carnival's shareholders," said Arison.
"Consequently, we believe that pursuing this acquisition any
further would not be in the best interest of our shareholders."
Carnival acquired 1.8% of NCL in the weeks leading up to its
unsolicited offer.
For Star, the NCL stake would potentially allow Asia's dominant
operator to double its fleet (Star has nine ships, as does NCL) and
gain new routes in the Caribbean and Europe, although it remains
unclear exactly how the new partnership will work.
Following meetings with Star, NCL officials said the two
companies are considering a sales and marketing alliance, and an
agreement could extend to other areas as well. Star officials said
NCL wants to remain independent.
Although the dominant line among Asians, Star has very little
presence in the North American market.
NCL's board had advised shareholders to reject Carnival's
unsolicited $1.7 billion tender, just before Star upped its stake
in NCL.
Geir Aune, NCL's president, called the Carnival bid
"substantially lower than the value of NCL today" and not
reflective "of the future potential of [NCL]. On that background,
the board advises shareholders against accepting Carnival's bid." A
meeting in London between Siem and Arison ended on Dec. 13 without
an agreement.
Carnival was not alone in seeking a deal for NCL. Florida-based
family cruise operator Premier Cruises, sought to enter the bidding
for NCL late last week, approaching the Oslo-based line to discuss
a merger. But NCL wasn't willing to discuss a deal, said Michael
Lewitt, Premier's vice chairman. "I don't think [NCL] is
particularly interested," Lewitt said on Dec. 15.
Premier sought a merger with NCL because, "We want to grow,
too," said Lewitt. "We want to contribute to the consolidation"
among cruising's smaller lines, he added. But Siem said a meeting
with Premier is "not a reality in the near term." Siem did say
"there are other" cruise lines in addition to Star and Premier with
which NCL has been in contact, but the company declined to say if
NCL was planning talks with the other parties.
Carnival Corp. launched the fray for cruising's fourth-largest
operator on Dec. 1.