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Old March 16th, 2006, 02:53 PM
Rev22:17 Rev22:17 is offline
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Join Date: May 2003
Location: Massachusetts
Posts: 4,770


Norm - surprised to see you even posting at Princess ... thought you gave them up forever after Carnival bought them.

Splitting hairs, Carnival Corporation (NYSE: CCL) actualy did not buy P&O Princess Cruises Plc. Rather, the two companies merged operations through a convoluted corporate structure that causes them to operate as one. The arrangement involves a "special voting share" in each corporation, held in a special depository trust, that mirrors the vote of the other corporation's real stockholders on matters that require combined approval and that act as absolute vetoes whenever the other corporation's shareholders reject a matter that requires separate approval of both companies. Also, the boards of both companies have the same members so they make the same decisions and there are provisions whereby corporate profits and losses get shared in proportion to the outstanding stock. Functionally, though, this was not a merger of equals. Rather, the management of Carnival Corporation became the overall management of the combined entity and the former P&O Princess Cruises Plc., now known as Carnival Plc. (LSE: CCL), effectively operates as a division equal to Carnival Corporation's other divisions.

That said, your basic premis is exactly right. The merger of operations was the proverbial "last straw" in moore ways than one! I not only stopped cruiseing with them, but also liquidated my stock in the parent company. Nonetheless, the investor in me monitors the whole industry because a significant development by one company -- or even a new upstart -- can have a profound impact on another.

I still think it's the best line out there in their price range.

That's hard to assess. Thanks to a "cost reduction programme" implemented starting in 2001, Princess clearly had slipped to the bottom of the "premium" segment, or aguably into the "mainstream" segment, at the time of the merger of operations in 2003. I noticed a significant step up when I moved to Celebrity Cruises. In fact, Princess seems to compete more directly with Royal Caribbean International, which is at the top of the "mainstream" segment, than with Celebrity Cruises, which is at the top of the "premium" segment, now.

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