Filing under Rule 425 under
the Securities Act of 1933
and deemed filed under Rules 14d-2 and 14a-12
of the Securities Exchange Act of 1934
Filing by: Carnival Corporation
Subject Company: P&O Princess Cruises plc
SEC File No. of Princess: 001-15136
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA OR
JAPAN
8 January 2003
CARNIVAL CORPORATION
RECOMMENDED DLC TRANSACTION WITH P&O PRINCESS AND PARTIAL SHARE OFFER
Micky Arison, the Chairman and Chief Executive of Carnival, said:
"We are extremely pleased that the board of P&O Princess has recommended the
Carnival DLC transaction to P&O Princess shareholders. Our DLC structure
provides the current P&O Princess shareholders with the opportunity to
participate in the largest cruise vacation group in the most exciting and
dynamic segment of the leisure travel industry. I look forward to working with
Peter Ratcliffe, who will be an executive director of both companies. We urge
P&O Princess and Carnival shareholders to approve the DLC transaction at the
forthcoming shareholder meetings, and we look forward to completion early in the
second quarter of 2003."
SUMMARY
The board of Carnival announces that Carnival and P&O Princess have today
entered into an agreement to combine the two companies through a dual listed
company structure. The board of P&O Princess has recommended the DLC transaction
to P&O Princess shareholders. As a result, all the pre-conditions to Carnival's
DLC proposal of 24 October 2002 have been satisfied.
The combination of Carnival and P&O Princess will create the largest cruise
vacation group in the world, based on revenue, passengers carried and available
capacity. The Combined Group will have a wide range of complementary brands, a
significant presence in the key cruise vacation regions worldwide, an enhanced
ability to attract customers from other vacation options to the cruise sector, a
strong balance sheet from which to drive future capacity and growth and
significant opportunities to benefit from disseminating best operating practices
throughout the Combined Group.
Although the companies will continue to be separate legal entities, with their
own board of directors and senior management, Carnival and P&O Princess will be
managed and operated as if they were a single economic enterprise. The
companies' economic interests will be aligned and they will pursue common
objectives. The boards of Carnival and P&O Princess will be identical and the
Combined Group will be managed by a single senior executive management team.
Accordingly, as part of the DLC transaction, P&O Princess intends to change its
name to Carnival (UK) plc at the P&O Princess EGM. The existing well established
brands operated by P&O Princess will not be affected by the change to the parent
company name.
Under the DLC transaction, the equalisation ratio will be 0.3004 Carnival shares
for each P&O Princess share. The "look through" value per P&O Princess share
under the DLC transaction is 481 pence and values the entire existing issued
share capital of P&O Princess at approximately (Pounds)3.3 billion. Carnival
shareholders will hold approximately 74 per cent. and P&O Princess shareholders
will hold approximately 26 per cent. of the equity of the Combined Group.
In connection with the DLC transaction, Carnival is making the Partial Share
Offer. The Partial Share Offer will enable P&O Princess shareholders to exchange
P&O Princess shares for Carnival shares on the basis of 0.3004 Carnival shares
for each P&O Princess share up to, in aggregate, a maximum of 20 per cent. of
P&O Princess' issued share capital.
The existing primary listings of Carnival on the New York Stock Exchange and P&O
Princess on the London Stock Exchange will be maintained and the existing full
index participations of Carnival in the S&P 500 and of P&O Princess in the FTSE
100 are expected to be retained. The Combined Group will continue to provide an
investor relations programme in both the US and the UK.
The documentation relating to the DLC transaction and the Partial Share Offer
will be filed with the SEC and the UKLA, as applicable, as soon as practicable.
A copy of the SEC filings will be available on the SEC website shortly after
filing. Carnival and P&O Princess currently expect that the documentation will
be posted to shareholders in late February/early March following review by the
SEC and UKLA. The implementation of the DLC transaction is subject to, among
other things, shareholder approval by both P&O Princess and Carnival
shareholders at their respective shareholder meetings. Carnival and P&O Princess
currently expect these meetings to occur in late March/early April and full
details will be contained in the documentation to be sent to P&O Princess and
Carnival shareholders. The DLC transaction and the Partial Share Offer are
expected to complete early in the second quarter of 2003.
This summary should be read in conjunction with the full text of this
announcement.
Enquiries:
Carnival Telephone: +1 305 599 2600
Micky Arison
Howard Frank
Merrill Lynch Telephone: +44 20 7628 1000
Philip Yates
Mark Brooker
Stuart Faulkner
UBS Warburg Telephone: +44 20 7567 8000
Tom Cooper
Alistair Defriez
Philip Ellick
Financial Dynamics Telephone: +44 20 7831 3113
Nic Bennett
The directors of Carnival accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Carnival (who have taken all reasonable care to ensure such is the case), the
information contained herein for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information except that the only responsibility accepted by them for the
information in this announcement relating to P&O Princess which has been
compiled from published sources is to ensure that the information has been
correctly and fairly reproduced and presented.
Merrill Lynch International and UBS Warburg Ltd., a subsidiary of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the Carnival DLC transaction and the
Partial Share Offer and will not be responsible to anyone other than Carnival
for providing the protections afforded to clients respectively of Merrill Lynch
International and UBS Warburg Ltd. as the case may be or for providing advice in
relation to the Carnival DLC transaction and the Partial Share Offer.
SHAREHOLDER DISCLOSURE OBLIGATIONS
Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of P&O Princess or Carnival, owns or controls, or become the owner or
controller, directly or indirectly of one per cent. or more of any class of
securities of P&O Princess or Carnival is generally required under the
provisions of Rule 8 of the Takeover Code to disclose to a Regulatory
Information Service ("RIS") and the Panel of every dealing in such securities
during the period from 16 December 2001, the date of the announcement of the
original Offer, until the closing of the DLC transaction. Dealings by Carnival
or P&O Princess or by their respective "associates" (within the definitions set
out in the Takeover Code) in any class of securities of Carnival or P&O Princess
must also be disclosed. Please consult your financial advisor immediately if you
believe this rule may be applicable to you.
Disclosure should be made on an appropriate form before 12 noon (London time) on
the business day following the date of the dealing transaction. These
disclosures should be registered with a RIS (e.g. the Company Announcements
Office of the London Stock Exchange (fax number: +44 20 7588 6057)) and to the
Panel (fax number: +44 20 7256 9386).
CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the US Private Securities Litigation Reform Act of 1995.
Carnival Corporation has tried, wherever possible, to identify such statements
by using words such as "anticipate", "assume", "believe", "expect", "forecast",
"future", "intend", "plan" and words and terms of similar substance in
connection with any discussion of future operating or financial performance.
These forward-looking statements, including those which may impact the
forecasting of Carnival's net revenue yields, booking levels, pricing, occupancy
or business prospects, involve known and unknown risks, uncertainties and other
factors, which may cause Carnival's
actual results, performances or achievements to be materially different from any
future results, performances or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions which may impact levels of disposable
income of consumers and the net revenue yields for Carnival's cruise products;
consumer demand for cruises and other vacation options; other vacation industry
competition; effects on consumer demand of armed conflicts, political
instability, terrorism, adverse media publicity and the availability of air
service; shifts in consumer booking patterns; increases in vacation industry
capacity, including cruise capacity; continued availability of attractive port
destinations; changes in tax laws and regulations; changes and disruptions in
equity, financial and insurance markets; Carnival's financial and contractual
counterparties' ability to perform; Carnival's ability to implement its brand
strategy, Carnival's ability to implement its shipbuilding program and to
continue to expand its business worldwide; Carnival's ability to attract and
retain shipboard crew; changes in foreign currency and interest rates and
increases in security, food, fuel, and insurance costs; delivery of new ships on
schedule and at the contracted prices; weather patterns and natural disasters;
unscheduled ship repairs and drydocking; incidents involving cruise ships;
impact of pending or threatened litigation; Carnival's ability to successfully
implement cost improvement plans; the continuing financial viability and/or
consolidation of Carnival's travel agent distribution system; Carnival's ability
to successfully integrate business acquisitions and changes in laws and
regulations.
These risks may not be exhaustive. Carnival operates in a continually changing
business environment, and new risks emerge from time to time. Carnival cannot
predict such risks nor can it assess the impact, if any, of such risks on its
business or the extent to which any risk, or combination of risks may cause
actual results to differ from those projected in any forward-looking statements.
Accordingly, forward-looking statements should not be relied upon as a
prediction of actual results. Carnival undertakes no obligation publicly to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
CARNIVAL PLANS TO FILE WITH THE US SECURITIES AND EXCHANGE COMMISSION IN
CONNECTION WITH ITS DUAL LISTED COMPANY PROPOSAL (WHICH INCLUDES A PARTIAL SHARE
OFFER TO P&O PRINCESS SHAREHOLDERS) A REGISTRATION STATEMENT ON FORM S-4/PROXY
STATEMENT ON SCHEDULE 14A, AS WELL AS A REGISTRATION STATEMENT ON FORM
S-4/STATEMENT ON SCHEDULE TO. BOTH REGISTRATION STATEMENTS WILL CONTAIN A
PROSPECTUS AND OTHER DOCUMENTS RELATING TO THE DUAL LISTED COMPANY PROPOSAL.
CARNIVAL PLANS TO MAIL TO SHAREHOLDERS OF P&O PRINCESS THE PROSPECTUS CONTAINED
IN THE REGISTRATION STATEMENT/SCHEDULE TO AFTER IT HAS BEEN DECLARED EFFECTIVE
BY THE SEC. CARNIVAL PLANS TO MAIL THE PROXY STATEMENT AND THE PROSPECTUS
CONTAINED IN THE REGISTRATION STATEMENT/PROXY STATEMENT TO ITS SHAREHOLDERS AT
OR ABOUT THE SAME TIME. THESE REGISTRATION STATEMENTS, THE PROSPECTUSES, THE
PROXY STATEMENT AND THE SCHEDULE TO WILL CONTAIN IMPORTANT INFORMATION ABOUT
CARNIVAL, P&O PRINCESS, THE DUAL LISTED COMPANY PROPOSAL AND RELATED MATTERS.
STOCKHOLDERS SHOULD READ THE REGISTRATION STATEMENTS, THE PROSPECTUSES, THE
PROXY STATEMENT, THE SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE DUAL LISTED COMPANY PROPOSAL CAREFULLY BEFORE THEY MAKE ANY
DECISION WITH RESPECT TO THE PROPOSAL. THE REGISTRATION STATEMENTS, THE
PROSPECTUSES, THE PROXY STATEMENT, THE SCHEDULE TO AND ALL OTHER DOCUMENTS FILED
WITH THE SEC IN CONNECTION WITH THE DUAL LISTED COMPANY PROPOSAL AND PRIOR
PRECONDITIONAL OFFER WILL BE AVAILABLE WHEN FILED FREE OF CHARGE AT THE SEC'S
WEB SITE, AT WWW.SEC.GOV. IN ADDITION, THESE DOCUMENTS WILL BE MADE AVAILABLE TO
SHAREHOLDERS FREE OF CHARGE BY WRITING TO TIM GALLAGHER AT CARNIVAL CORPORATION,
CARNIVAL PLACE, 3655 N.W. 87 AVENUE, MIAMI, FLORIDA, 33178-2428.
IN ADDITION TO THE REGISTRATION STATEMENTS, THE PROSPECTUSES, THE PROXY
STATEMENT, THE SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE DUAL LISTED COMPANY PROPOSAL, CARNIVAL IS OBLIGATED TO FILE
ANNUAL, QUARTERLY AND CURRENT REPORTS, PROXY STATEMENTS AND OTHER INFORMATION
WITH THE SEC. PERSONS MAY READ AND COPY ANY REPORTS, STATEMENTS AND OTHER
INFORMATION FILED WITH THE SEC AT THE SEC'S PUBLIC REFERENCE ROOM AT 450 FIFTH
STREET, N.W., WASHINGTON, D.C. 20549. PLEASE CALL THE SEC at 1-800-732-0330 FOR
FURTHER INFORMATION ON THE PUBLIC REFERENCE ROOM. FILINGS WITH THE SEC ALSO ARE
AVAILABLE TO THE PUBLIC FROM COMMERCIAL DOCUMENT-RETRIEVAL SERVICES AND THROUGH
THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.
THE IDENTITIES OF THE PARTICIPANTS IN THE SOLICITATION OF CARNIVAL SHAREHOLDERS
FOR PURPOSES OF RULE 14a-12(a)(1) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND
THEIR INTERESTS IN THE OFFER AND TRANSACTIONS RELATED TO IT ARE SET FORTH IN
APPENDIX V TO THE FULL TEXT OF THIS ANNOUNCEMENT.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA OR
JAPAN
8 January 2003
CARNIVAL CORPORATION
RECOMMENDED DLC TRANSACTION WITH P&O PRINCESS AND PARTIAL SHARE OFFER
1. Introduction
The board of Carnival announces that Carnival and P&O Princess have today
entered into an agreement to combine the two companies through a dual listed
company structure. The board of P&O Princess has recommended the DLC transaction
to P&O Princess shareholders. As a result, all the pre-conditions to Carnival's
DLC proposal of 24 October 2002 have been satisfied.
Under the Implementation Agreement, and subject to certain conditions described
in this announcement, the companies will enter into agreements and modify their
constitutional documents (the forms of which have been agreed with P&O Princess)
in order to implement the DLC transaction.
In addition, Carnival announces the terms of the Partial Share Offer, under
which P&O Princess shareholders will be able, subject to certain conditions, to
exchange P&O Princess shares for Carnival shares.
The terms of the DLC transaction and the Partial Share Offer are as announced by
Carnival on 24 October 2002.
As all the pre-conditions to the DLC proposal have been satisfied and the terms
of the DLC transaction have been announced in this document, Carnival, in
agreement with the Panel, will not be proceeding with its share exchange offer
of 7 February 2002.
2. The DLC transaction
The DLC transaction is a means of enabling Carnival and P&O Princess to combine
their management and operations as if they were a single economic enterprise,
while retaining their separate legal identities. This will be accomplished
through contractual arrangements and amendments to each company's constitutional
documents. In addition, the constitutional documents of the two companies will
be harmonised, to the extent practicable and permitted by law, to ensure their
corporate procedures are substantially similar. As part of the DLC transaction,
P&O Princess intends to change its name to Carnival (UK) plc at the P&O Princess
EGM.
The existing primary listings of Carnival on the New York Stock Exchange and P&O
Princess on the London Stock Exchange will be maintained and the existing full
index participations of Carnival in the S&P 500 and of P&O Princess in the FTSE
100 are expected to be retained. The Combined Group will continue to provide an
investor relations programme in both the US and the UK.
The DLC structure will allow P&O Princess shareholders who are required, or
wish, to hold shares in a UK-listed company included in the FTSE indices to
continue to do so and, as a result, to continue to participate as a shareholder
in the global cruise industry through P&O Princess.
The equalisation ratio in the DLC transaction will initially be 0.3004 Carnival
shares for each P&O Princess share. On implementation of the DLC transaction, it
is intended that the P&O Princess shares will be reorganised such that one P&O
Princess share will be equivalent to one Carnival share. The ratio of P&O
Princess shares to P&O Princess ADSs will also be adjusted so that one P&O
Princess ADS will be equivalent to one P&O Princess share and also to one
Carnival share. Carnival shareholders will hold approximately 74 per cent. of
the equity of the Combined Group and existing P&O Princess shareholders will
hold approximately 26 per cent. The Conditions of the DLC transaction are set
out in Part A of Appendix I.
The "look through" value per P&O Princess share under the DLC transaction, based
on the closing price of $25.77 per Carnival share on 7 January 2003, is 481
pence. This represents:
. a premium of 51.6 per cent. to the closing middle-market price of 317
pence per P&O Princess share on 19 November 2001, the last business day
prior to the announcement of the Royal Caribbean DLC transaction; and
. a premium of 8.6 per cent. to the closing middle-market price of 442.5
pence per P&O Princess share on 7 January 2003, the last business day
prior to the date of this announcement.
3. The Partial Share Offer
In connection with the DLC transaction, Carnival is making the Partial Share
Offer. The Partial Share Offer enables P&O Princess shareholders to elect to
exchange P&O Princess shares for Carnival shares on the basis of 0.3004 Carnival
shares for each P&O Princess share and 1.2016 Carnival shares for each P&O
Princess ADS. P&O Princess shareholders can elect to accept the Partial Share
Offer in respect of all or a portion of their P&O Princess shareholdings.
P&O Princess shareholders who elect to accept the Partial Share Offer in respect
of more than 20 per cent. of their holdings of P&O Princess shares will have
their elections satisfied in full provided the total elections for the Partial
Share Offer do not exceed, in aggregate, 20 per cent. of P&O Princess' issued
share capital. If the aggregate amount of elections under the Partial Share
Offer exceeds 20 per cent. of the issued share capital of P&O Princess when the
Partial Share Offer is made, P&O Princess shareholders will receive Carnival
shares as follows:
.. P&O Princess shareholders who elect to accept the Partial Share Offer in
respect of 20 per cent. or less of their holdings of P&O Princess shares
will have their elections satisfied in full; and
.. P&O Princess shareholders who elect to accept the Partial Share Offer in
respect of more than 20 per cent. of their holdings of P&O Princess shares
will have their election in respect of 20 per cent. of their holdings
satisfied in full and their election in respect of the excess over 20 per
cent. scaled back pro rata based on the total number of P&O Princess shares
tendered into the Partial Share Offer.
If the Partial Share Offer is taken up in full, approximately 79 per cent. of
the equity of the Combined Group will be held by Carnival shareholders
(including approximately five per cent. held by those P&O Princess shareholders
who have elected for the Partial Share Offer) and approximately 21 per cent. by
P&O Princess shareholders who have retained their P&O Princess shares. The
equalisation ratio will not be affected by the level of the take-up of the
Partial Share Offer.
The P&O Princess board is not making any recommendation as to whether P&O
Princess shareholders should tender or refrain from tendering their P&O Princess
shares.
The Partial Share Offer will initially be open for acceptance until 5.00 p.m.,
London time, 12.00 noon, New York City time, on the date of the P&O Princess EGM
(which is expected to commence at 11.00 a.m. London time). The Partial Share
Offer is subject to the conditions set out in Part B of Appendix I which include
the implementation of the DLC structure. The DLC structure is expected to be
implemented shortly after the P&O Princess EGM. The Partial Share Offer will not
close if the DLC structure is not implemented.
If the result of the shareholder vote at the P&O Princess EGM has not been
announced by 5.00 p.m., London time, 12.00 noon, New York City time, on the date
of the P&O Princess EGM, or if any other condition to the Partial Share Offer
has not been satisfied or waived by such date and time, Carnival will, with the
permission of the Panel, extend the acceptance deadline for the Partial Share
Offer and will announce the new deadline. Carnival does not envisage it will be
necessary to extend the Partial Share Offer, but in the event that an extension
is made, it is likely to be for a period of less than 14 days.
P&O Princess shares acquired under the Partial Share Offer will be acquired free
from all liens, charges and encumbrances and with all rights attached thereto.
P&O Princess shareholders will be entitled to retain all dividends paid or
payable on such P&O Princess shares in respect of the period from the date of
this announcement until the date the Partial Share Offer becomes wholly
unconditional.
The Carnival shares will be issued and credited as fully paid and will rank pari
passu in all respects with the existing Carnival shares. Fractions of Carnival
shares will not be issued. Application will be made for the Carnival shares to
be issued under the Partial Share Offer to be admitted to listing on the NYSE.
Carnival shares will not be listed on the London Stock Exchange.
A P&O Princess shareholder will be able to elect for the Partial Share Offer
whether or not such shareholder has voted in favour of the resolution to
implement the DLC transaction.
The Partial Share Offer will be registered under, and will be subject to, the
applicable US securities laws and regulations. Carnival and P&O Princess have
been advised that these include a rule issued by the SEC that will prohibit any
shareholder from tendering into the Partial Share Offer a number of P&O Princess
shares greater than such shareholder's "net long position" in such shares both
at the time of tender and at the completion of the Partial Share Offer. A
shareholder's net long position is the excess, if any, of his or her long
position in P&O Princess shares over his or her short position in P&O Princess
shares, in each case as defined in the rule. While these definitions and the
application of this rule can be complex, any P&O Princess shares borrowed under
the normal arrangements for stock borrowing in the UK market will normally be
included in both the borrower's long position and short position, and thus will
not increase the borrower's net long position. Accordingly, such borrowings will
not increase the number of P&O Princess shares that the borrower can tender into
the Partial Share Offer. In this way, the rule will restrict the ability of P&O
Princess shareholders to tender borrowed shares in the Partial Share Offer. In
the case of an offer such as the Partial Share Offer, the SEC takes the position
that the rule applies to both tenders and borrowings made outside the US.
4. Information on the Combined Group
The Combined Group will be the largest cruise vacation group in the world, based
on revenues, passengers carried and available capacity. It will have a wide
portfolio of complementary brands, both by geography and product offering, and
will include some of the best known cruise brands globally. The combination will
allow the Combined Group to offer a wider range of vacation choices for its
passengers and is expected to enhance its ability to attract passengers from
land-based vacations to cruise vacations.
The Combined Group's brands will include Carnival Cruise Lines, Princess
Cruises, Holland America Line, P&O Cruises, Costa Cruises, Cunard Line, Seabourn
Cruise Line, Windstar Cruises, AIDA, A'ROSA, Swan Hellenic, Ocean Village and
P&O Cruises (Australia). The Combined Group will serve all of the key cruising
destinations, including Alaska, Australia, Bahamas, Bermuda, Canada, the
Caribbean, Europe, the Hawaiian Islands, the Mexican Riviera, the Mediterranean,
New England, the Panama Canal, South America and other exotic destinations
worldwide.
The Combined Group expects to operate a fleet of 65 cruise ships offering 99,964
lower berths, with 18 additional cruise ships with 42,260 lower berths scheduled
to be added over the next three and a half years, and will be a leading provider
of cruises to all major cruise destinations outside the Far East. The Combined
Group will have one of the youngest fleets among the major cruise vacation
operators, with an average expected age of just 7.5 years as of 31 January 2003.
The Combined Group will also operate two private destination ports of call in
the Caribbean for the exclusive use of its passengers, two river boats and will
offer land-based tour packages as part of its vacation product alternatives. For
the year ended 30 November 2001, on a pro forma US GAAP basis, the Combined
Group would have reported revenues of approximately $7.0 billion and operating
income of approximately $1.2 billion. As at 31 August 2002, on a pro forma US
GAAP basis, the Combined Group would have had total assets of over $20 billion.
Carnival and P&O Princess together carried approximately 4.7 million passengers
in fiscal 2002.
5. Benefits of the proposed combination of Carnival and P&O Princess
Carnival and P&O Princess believe that the principal benefits of the creation of
the Combined Group are as follows:
Complementary well-known brands operating globally
The Combined Group will be the largest cruise vacation group in the world, based
on revenue, passengers carried and available capacity. It will have a wide
portfolio of complementary brands, both by geography and product offering, and
will include some of the best known cruise brands globally. The combination will
allow the Combined Group to offer a wider range of vacation choices for its
passengers and is expected to enhance its ability to attract more passengers
from land-based vacations.
Benefits of sharing best practices and generating cost savings
The Combined Group will be managed as if the two companies constituted a single
economic enterprise by a single senior executive management team and identical
boards of directors.
Carnival and P&O Princess expect that the combination will generate cost
savings, which are expected to come from the sharing of best practices of the
management teams across the Combined Group, achieving operating efficiencies in
such areas as purchasing and rationalising support operations in locations
served by both companies. Further details regarding the expected cost savings
will be set out in the documentation to be sent to shareholders in due course.
Financial flexibility and access to capital markets
The Combined Group will have substantial financial flexibility, with strong
operating cash flow, low leverage and a strong balance sheet and the Combined
Group is expected to maintain a strong investment grade credit rating.
The Combined Group is also expected to have greater access to capital markets.
Carnival's shares will remain listed on the NYSE and are expected to continue to
be included in the S&P 500. P&O Princess' shares will remain listed on the
London Stock Exchange and are expected to remain eligible for inclusion in the
FTSE series of indices and are expected to continue to be included with full
weighting in the FTSE 100.
High quality combined fleet to enhance growth within the cruise industry
Upon completion of the DLC transaction, the Combined Group expects to operate a
fleet of 65 cruise ships with an aggregate capacity of 99,964 lower berths.
Carnival and P&O Princess together have an additional 18 new cruise ships on
order, with an aggregate capacity of 42,260 lower berths, scheduled for delivery
in the next three and a half years. Carnival and P&O Princess also expect that
the Combined Group will have one of the youngest and most modern fleets in the
cruise industry, with an average vessel age (weighted by lower berths) of just
7.5 years expected as at 31 January 2003.
The Combined Group expects to deploy its diversified fleet strategically in
order to increase its global reach and enter new and developing markets. This
strategic deployment is expected to allow the Combined Group to appeal to the
largest target audience by providing brands, products and itineraries with the
widest appeal in a particular geographic region.
Continued participation in the global cruise industry for P&O Princess
shareholders as a result of the DLC structure
As described above, following the implementation of the DLC structure, P&O
Princess is expected to remain included in the FTSE 100. This will allow P&O
Princess shareholders who are required or wish to hold shares in a UK-listed
company included in the FTSE indices to continue to do so and, as a result, to
continue to participate as a shareholder in the global cruise industry through
P&O Princess. A share acquisition or exchange offer or other more common means
of combining the businesses of Carnival and P&O Princess in
which all P&O Princess shareholders would receive Carnival shares, which are not
eligible for inclusion in the FTSE series of indices, and/or a partial cash
alternative would not have afforded all P&O Princess shareholders this
opportunity. Additionally, the Partial Share Offer for up to 20 per cent. of P&O
Princess' share capital allows those P&O Princess shareholders who would prefer
to participate in the Combined Group by holding shares in a US listed company
the opportunity to do so.
6. Dividends
Following completion of the DLC transaction, P&O Princess shareholders will
continue to receive dividends declared by P&O Princess and Carnival shareholders
will continue to receive dividends declared by Carnival. Dividends in respect of
both P&O Princess shares and Carnival shares declared after completion of the
DLC transaction will be paid at about the same time and in equalised amounts in
accordance with the equalisation ratio disregarding any amounts required to be
deducted or withheld in respect of taxes and the amount of any applicable tax
credits.
Carnival will continue to pay dividends in US dollars. P&O Princess shareholders
will continue to have the option to elect to receive dividends in US dollars or
pounds sterling in accordance with P&O Princess' existing procedures.
In order to align the timing of the dividends of the two companies and to ensure
that there is no interruption to the entitlement of quarterly dividends for
shareholders of either company as a result of the DLC transaction, the board of
P&O Princess has today declared a dividend of 3.0 cents per P&O Princess share
in respect of the fourth quarter of the 2002 financial year. This dividend will
be paid on 14 March 2003 to P&O Princess shareholders on the P&O Princess share
register on 21 February 2003. Carnival expects to pay its regular quarterly
dividend at about the same time. Unless they have elected otherwise, P&O
Princess ordinary shareholders will receive their dividend in pounds sterling,
converted at an exchange rate on 4 March 2003. Elections to receive dividends in
US dollars, or to participate in the dividend reinvestment plan, must be made by
28 February 2003. Holders of ADSs will receive their dividend of $0.12 per ADS
in US dollars.
In recent quarters, Carnival has paid quarterly dividends of 10.5 cents per
Carnival share which, based on the equalisation ratio, equates to approximately
3.15 cents per P&O Princess share. In recent quarters, P&O Princess has paid
quarterly dividends of 3.0 cents per P&O Princess share. Following completion of
the DLC transaction, it is intended that the value of dividends received by P&O
Princess shareholders will be consistent with Carnival's regular quarterly
dividend. Accordingly, had the Combined Group been in place for the last four
quarters, the dividends received by P&O Princess shareholders would have been
approximately five per cent. higher.
It is intended that the first dividend to be paid by the Combined Group will be
declared in April 2003, with a record date in May 2003, and payment date in June
2003.
7. Key features of the DLC transaction
Carnival and P&O Princess have entered into the Implementation Agreement which
contains provisions governing the implementation of the DLC transaction. In
addition, Carnival and P&O Princess have also finalised the agreed forms of the
other DLC documents which provide for the operation of the DLC structure
following completion of the DLC transaction. Although certain technical changes
have been made, the DLC documents are materially the same as those disclosed on
24 October 2002.
Copies of the agreed form of the DLC documents will be available as soon as
practicable following this announcement on Carnival's website at
www.carnivalcorp.com and on the website maintained by the SEC at www.sec.gov. In
addition, copies may be inspected from the date of this announcement during
usual business hours on any weekday at the offices of Herbert Smith, Exchange
House, Primrose Street, London, EC2A 2HS.
The key features of the DLC transaction are summarised below.
7.1 Separate entities and listings
The companies will continue to be separate legal entities with their own board
of directors and senior management, however, Carnival and P&O Princess will be
managed and operated as if they were a single economic enterprise. The
companies' economic interests will be aligned and they will pursue common
objectives. The boards of Carnival and P&O Princess will be identical and the
Combined Group will be managed by a single senior executive management team.
Although they will be operated as if they were a single economic enterprise, P&O
Princess and Carnival will remain separate corporations and will maintain
separate stock exchange listings. Carnival will continue to have a primary
listing on the NYSE and is expected to retain its existing index participations,
including its participation in the S&P 500. P&O Princess will continue to have a
primary listing on the London Stock Exchange and is expected to remain eligible
for full participation in the FTSE series of indices, including the FTSE 100. In
addition, P&O Princess ADSs will continue to be listed on the NYSE for the
foreseeable future.
7.2 No transfer of assets
The implementation of the DLC transaction will not involve any transfer of
assets between the Carnival group and the P&O Princess group. After
implementation of the DLC transaction, management of the Combined Group will
determine whether assets will be owned by Carnival or P&O Princess as is most
efficient and appropriate under the then prevailing circumstances. The Combined
Group will comprise all of the assets held by P&O Princess and Carnival
immediately prior to the implementation of the DLC transaction.
7.3 Rights of Carnival shareholders and P&O Princess shareholders
Carnival shareholders will continue to hold their shares in Carnival. P&O
Princess shareholders will continue to hold their shares in P&O Princess and/or
become shareholders in Carnival if they accept the Partial Share Offer. P&O
Princess shareholders will continue to receive dividends from P&O Princess and
Carnival shareholders will continue to receive dividends from Carnival. However,
the economic and voting interests of Carnival shareholders and P&O Princess
shareholders will effectively be identical as they will participate in the
Combined Group as a whole as a result of the arrangements described in this
announcement.
7.4 Common economic interests
Agreements between Carnival and P&O Princess will align the economic interests
of the two companies to ensure that they will be operated as a single economic
enterprise under the DLC structure. Carnival shareholders and P&O Princess
shareholders will have equalised rights to income and capital distributions from
the Combined Group. The economic interests represented by an individual share in
one company relative to the economic interests of an individual share in the
other company will be determined by reference to the equalisation ratio. The
equalisation ratio will initially be 0.3004 Carnival shares for each P&O
Princess share. However, on implementation of the DLC transaction, it is
intended that there will be a reorganisation of P&O Princess shares such that
the equalisation ratio will become one Carnival share for each P&O Princess
share and for each P&O Princess ADS. This reorganisation is intended to ease the
comparison between P&O Princess and Carnival shares following completion and
does not affect the economic terms of the DLC transaction. Accordingly, one
Carnival share will have rights to income and capital equivalent to that of one
P&O Princess share.
If one company has insufficient profits or is otherwise unable to pay a
dividend, Carnival and P&O Princess will, as far as practicable, enter into such
balancing transactions as are necessary to enable both companies to pay
dividends in accordance with the equalisation ratio. This may take the form of a
payment from one company to the other or a dividend payment on an equalisation
share.
Dividends will be equalised according to the equalisation ratio (and any
balancing transactions between the companies will be determined and made) before
deduction of any amounts in respect of the tax required to be deducted or
withheld and excluding the amounts of any tax credits or other tax benefits.
7.5 Unified board and management
Carnival and P&O Princess will be managed and operated as if they were a single
economic enterprise. Although each of Carnival and P&O Princess will continue to
exist as a separate company with its own board of directors and senior
management, the boards and senior executive management of each company will be
identical. In addition to their normal fiduciary duties to the company and
obligation to have regard to the interests of its shareholders, the directors of
each company will be entitled to have regard to the interests of the other
company and its shareholders.
Micky Arison, the Chairman and Chief Executive Officer of Carnival, will be
Chairman and Chief Executive Officer of both Carnival and P&O Princess and
Howard S. Frank, the Vice-Chairman and Chief Operating Officer of Carnival, will
be Vice-Chairman and Chief Operating Officer of both Carnival and P&O Princess.
Peter Ratcliffe, P&O Princess' Chief Executive Officer, will be an executive
director of both Carnival and P&O Princess. In addition, Gerald R. Cahill will
be the Chief Financial Officer of both Carnival and P&O Princess. The
headquarters of the Combined Group will be in Miami with a corporate office in
London.
Following completion of the DLC transaction, the directors of Carnival and P&O
Princess and their respective functions will be:
Name Function
---- --------
Micky Arison (1) Chairman and Chief Executive Officer
Howard S. Frank (1) Vice-Chairman and Chief Operating Officer
Robert Dickinson (1) Executive Director
Pier Luigi Foschi (3) Executive Director
A. Kirk Lanterman (1) Executive Director
Peter Ratcliffe (2) Executive Director
Ambassador Richard G. Capen, Jr. (1) Non-Executive Director
Arnold W. Donald (1) Non-Executive Director
Baroness Hogg (2) Non-Executive Director
Modesto A. Maidique (1) Non-Executive Director
Sir John Parker (2) Non-Executive Director
Stuart Subotnick (1) Non-Executive Director
Uzi Zucker (1) Non-Executive Director
Notes:
(1) Existing Carnival director
(2) Existing P&O Princess director
(3) New director
On completion of the DLC transaction, Stuart Subotnick will be designated as the
Senior Non-Executive Director. This is a newly created position which the
non-executive directors as a body will select, on an annual basis, from one of
their number.
The remaining current directors of Carnival - Shari Arison, Maks Birnbach, James
Dubin, Sherwood Weiser and Meshulam Zonis - will stand down from the board of
Carnival upon completion of the DLC transaction.
As previously announced, Lord Sterling will retire as Chairman of P&O Princess
and stand down from the P&O Princess board on completion of the DLC transaction.
The remaining current directors of P&O Princess - Peter Foy, Horst Rahe and Nick
Luff - will also stand down from the board upon completion of the DLC
transaction.
Resolutions relating to the appointment, removal and re-election of directors
after completion will be considered as a Joint Electorate Action and voted upon
by the shareholders of each company effectively voting together as a single
decision making body. All of the directors of Carnival and P&O Princess will
stand for re-election at the annual shareholder meetings of the Combined Group
to be held in 2003.
Carnival and P&O Princess comply with, and the Combined Group will comply with,
the applicable corporate governance requirements of the US Sarbanes-Oxley Act of
2002 and the NYSE. These are the corporate governance rules applicable to US
public companies. P&O Princess will also continue to comply with the rules of
the UK Listing Authority and the London Stock Exchange.
7.6 Name change
As part of the DLC transaction, P&O Princess intends to change its name to
Carnival (UK) plc at the P&O Princess EGM. The name change is intended to
communicate that, as a result of the DLC transaction, the two companies will
combine their management and operations as if they were a single economic
enterprise. The existing well established brands operated by P&O Princess will
not be affected by the change to the parent company name.
7.7 Voting arrangements
Under the terms of the DLC documents, the Carnival articles of incorporation and
by-laws and the P&O Princess memorandum and articles of association will be
amended to provide for special voting arrangements to be implemented so that in
most cases the shareholders of both companies effectively vote together as a
single decision-making body on matters requiring the approval of shareholders of
either company. The voting interests represented by an individual share in one
company relative to the voting interests of an individual share in the other
company will be determined by reference to the equalisation ratio. Accordingly,
following the reorganisation of P&O Princess shares on completion of the DLC
transaction, one Carnival share will have voting rights equivalent to those of
one P&O Princess share. Certain provisions designed to preserve the structure of
the DLC will be subject to the separate approvals of both P&O Princess
shareholders and Carnival shareholders, further details of which are set out in
Appendix II.
These voting arrangements are proposed to be implemented by entrenching them in
the constitutional documents of the two companies and through the Equalisation
and Governance Agreement and rights attaching to a specially created special
voting share to be issued by each company.
Under the articles of P&O Princess, P&O Princess shares held by Carnival will
have no voting rights at any general meeting of P&O Princess unless the total
holding of P&O Princess shares by Carnival equals or exceeds 90 per cent. of the
P&O Princess shares then in issue. Carnival will however receive dividends and
other distributions paid on its P&O Princess shares.
7.8 Cross guarantees
Upon completion of the DLC transaction, P&O Princess and Carnival will each
execute Deeds of Guarantee for the purpose of guaranteeing contractual monetary
amounts owed by the other company which are incurred on or after the
implementation of the DLC transaction. Future creditors of Carnival and P&O
Princess entitled to the benefit of the Deeds of Guarantee will, to the extent
possible, be placed in the same position as if the relevant debts were also owed
by the other company.
7.9 Restrictions on takeovers
The Panel has confirmed that, on the basis of information currently available to
it, upon completion of the DLC transaction, neither P&O Princess nor Carnival
will be a company to which the Takeover Code applies. The Takeover Code provides
a number of protections for shareholders, particularly in relation to mandatory
offers where a person or group of persons acting in concert acquires in excess
of 30 per cent. of the voting rights of a company.
Provisions will be included in the constitutional documents of Carnival and P&O
Princess which would apply to any person, or group of persons acting in concert,
that acquires shares in the Combined Group which would trigger a mandatory offer
obligation as if the Takeover Code applied to the Combined Group on a combined
basis. To the extent that the resulting shareholding exceeds one of the current
limits in Rule 9 of the Takeover Code, such shares would be disenfranchised
unless an offer for all shares in the Combined Group at a price equivalent to
that applicable to the acquisition has been made. A Buy-Back by Carnival or P&O
Princess of its own shares would not trigger these provisions.
There are certain exceptions to these provisions in the case of Micky Arison,
other members of the Arison family and trusts for their benefit which together
will hold approximately 35 per cent. of the equity of the Combined Group. Under
the DLC documents, the Arison family and trusts for their benefit may acquire
shares in the Combined Group without triggering these provisions as long as
their aggregate holdings do not increase by more than one per cent. of the
voting power of the Combined Group in any period of 12 consecutive months,
subject to their combined holdings not exceeding 40 per cent. of the voting
power of the Combined Group. These parties may acquire additional shares or
voting power without being subject to these restrictions if they comply with the
offer requirement described above.
7.10 Buy-Backs of Combined Group shares
Subject to applicable law, each of Carnival and P&O Princess may purchase shares
in the other and acquire its own shares. Under the terms of the DLC documents,
unless approved as a Class Rights Action, neither Carnival nor P&O Princess may
Buy-Back P&O Princess shares in the two year period following the date on which
the DLC structure is implemented. After expiration of the initial two year
period, for each of the subsequent three years neither Carnival nor P&O Princess
may Buy-Back P&O Princess shares in excess of five per cent. per year of the
issued P&O Princess shares (calculated as at the first day in such annual
period). Thereafter, there shall be no restriction in the DLC documents on the
number of P&O Princess shares which may be the subject of a Buy-Back. There are
no restrictions in the DLC documents on the number of Carnival shares which may
be purchased by Carnival.
7.11 Termination amount
The Implementation Agreement includes a provision for a termination amount equal
to $49.4 million (being one per cent. of the market capitalisation of P&O
Princess at close of business on 7 January 2003) to be paid by Carnival or P&O
Princess in certain circumstances. Further details are set out in Appendix II.
8. Shareholder approval process and timetable
The documentation relating to the DLC transaction and the Partial Share Offer
will be filed with the SEC and the UKLA, as applicable, as soon as practicable.
A copy of the SEC filings will be available on the SEC website shortly after
filing. Carnival and P&O Princess currently expect that the documentation will
be posted to shareholders in late February/early March following review by the
SEC and UKLA. The implementation of the DLC transaction is subject to, among
other things, shareholder approval by both P&O Princess and Carnival
shareholders at their respective shareholder meetings. Carnival and P&O Princess
currently expect these meetings to occur in late March/early April and full
details will be contained in the documentation to be sent to P&O Princess and
Carnival shareholders. The DLC transaction and the Partial Share Offer are
expected to complete early in the second quarter of 2003.
Micky Arison, other members of the Arison family and trusts for their benefit
have entered into undertakings under which they will be required to cause shares
beneficially owned by them representing approximately 47 per cent. of the voting
rights in Carnival to vote in favour of the resolutions required to implement
the DLC structure at the Carnival Special Meeting. Such undertakings are
irrevocable except in circumstances where the DLC proposal is withdrawn or
lapses.
9. Approvals required by regulatory authorities
Carnival has previously received clearance from the EC and the FTC for the
combination of its business with that of P&O Princess, pursuant to the share
exchange offer. Carnival and P&O Princess have been advised that the FTC
clearance is also applicable to a combination accomplished pursuant to the DLC
transaction and, therefore, that Carnival is not required to undergo any further
regulatory process in the US in relation to the DLC transaction. Carnival is
submitting to the EC a renotification for clearance of the combination pursuant
to the DLC transaction. Carnival and P&O Princess have been advised that there
is no reason why the EC's appraisal of the DLC transaction would in any way
differ from its appraisal of the share exchange offer. Accordingly, Carnival and
P&O Princess expect the DLC transaction to be cleared by the EC during the first
quarter of 2003.
10. Employees
The combination of Carnival and P&O Princess will offer employees exciting
career prospects. Employees of the Combined Group will benefit from a larger
operating platform and a business of greater international size and scope.
Carnival confirms that the existing employment rights, including pension rights,
of P&O Princess employees will be fully safeguarded. Carnival does not expect
that there will be significant redundancies arising from the implementation of
the DLC transaction.
11. P&O Princess Employee Share Incentive Plans
On completion of the DLC transaction, all awards and options granted under the
P&O Princess Employee Share Incentive Plans will vest in full and become capable
of release or exercise immediately following completion of the DLC transaction.
12. Accounting treatment and reporting
The companies expect to account for the DLC transaction as a purchase by
Carnival under US GAAP and an acquisition by Carnival under UK GAAP. Following
completion of the DLC transaction, the Combined Group intends to publish
combined financial statements denominated in US dollars and prepared in
accordance with US GAAP. Carnival and P&O Princess will also prepare any other
financial information needed to meet their respective legal and regulatory
requirements. P&O Princess will change its financial year end to 30 November so
that it will be the same as Carnival's current financial year end.
13. Interests in P&O Princess shares
Neither Carnival, nor any of the directors of Carnival, nor, so far as Carnival
is aware, any other party acting in concert with Carnival, owns or controls any
P&O Princess shares or holds any option to purchase any P&O Princess shares or
has entered into any derivatives referenced to P&O Princess shares, except that
Mr A. Kirk Lanterman, a director and executive officer of Carnival, beneficially
owns 16 P&O Princess shares.
14. General
The establishment of the DLC transaction is subject to the applicable provisions
of the Takeover Code. In particular, in accordance with Rule 13 of the Takeover
Code, neither Carnival nor P&O Princess may rely on certain conditions to the
Implementation Agreement as a reason not to proceed with completion of the DLC
transaction, without prior consent from the Panel. Termination of the
Implementation Agreement by Carnival on the grounds that a competing proposal
has been announced will not be subject to the prior consent of the Panel.
If the Implementation Agreement is terminated, Carnival will make the share
exchange offer of 7 February 2002, unless the termination has been as a result
of (i) P&O Princess shareholders voting against the resolution required to
implement the DLC transaction at the P&O Princess EGM; or (ii) a condition of
the Implementation Agreement being invoked which Carnival notifies the Panel it
would invoke in relation to the conditions of its share exchange offer, such
invocation requiring the consent of the Panel in accordance with Note 2 to Rule
13 of the Takeover Code. In particular, Carnival will proceed with its share
exchange
offer where the Implementation Agreement has been terminated by Carnival as a
result of the P&O Princess board withdrawing or adversely modifying its
recommendation of the DLC transaction or because a competing proposal is
announced.
Certain additional details relating to the structure of the DLC are set out in
Appendix II. The definitions used in this announcement are contained in Appendix
III. The sources and bases of information used in this announcement are
contained in Appendix IV.
This announcement does not constitute an offer or an invitation to acquire
shares or securities.
Enquiries:
Carnival Telephone: +1 305 599 2600
Micky Arison
Howard Frank
Merrill Lynch Telephone: +44 20 7628 1000
Philip Yates
Mark Brooker
Stuart Faulkner
UBS Warburg Telephone: +44 20 7567 8000
Tom Cooper
Alistair Defriez
Philip Ellick
Financial Dynamics Telephone: +44 20 7831 3113
Nic Bennett
The directors of Carnival accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Carnival (who have taken all reasonable care to ensure such is the case), the
information contained herein for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information except that the only responsibility accepted by them for the
information in this announcement relating to P&O Princess which has been
compiled from published sources is to ensure that the information has been
correctly and fairly reproduced and presented.
Merrill Lynch International and UBS Warburg Ltd., a subsidiary of UBS AG, are
acting as joint financial advisors and joint corporate brokers exclusively to
Carnival and no-one else in connection with the Carnival DLC transaction and the
Partial Share Offer and will not be responsible to anyone other than Carnival
for providing the protections afforded to clients respectively of Merrill Lynch
International and UBS Warburg Ltd. as the case may be or for providing advice in
relation to the Carnival DLC transaction and the Partial Share Offer.
SHAREHOLDER DISCLOSURE OBLIGATIONS
Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of P&O Princess or Carnival, owns or controls, or become the owner or
controller, directly or indirectly of one per cent. or more of any class of
securities of P&O Princess or Carnival is generally required under the
provisions of Rule 8 of the Takeover Code to disclose to a Regulatory
Information Service ("RIS") and the Panel of every dealing in such securities
during the period from 16 December 2001, the date of the announcement of the
original Offer, until the closing of the DLC transaction. Dealings by Carnival
or P&O Princess or by their respective "associates" (within the definitions set
out in the Takeover Code) in any class of securities of Carnival or P&O Princess
must also be disclosed. Please consult your financial advisor immediately if you
believe this rule may be applicable to you.
Disclosure should be made on an appropriate form before 12 noon (London time) on
the business day following the date of the dealing transaction. These
disclosures should be registered with a RIS (e.g. the Company Announcements
Office of the London Stock Exchange (fax number: +44 20 7588 6057)) and to the
Panel (fax number: +44 20 7256 9386).
CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain statements in this announcement constitute "forward-looking statements"
within the meaning of the US Private Securities Litigation Reform Act of 1995.
Carnival Corporation has tried, wherever possible, to identify such statements
by using words such as "anticipate", "assume", "believe", "expect", "forecast",
"future", "intend", "plan" and words and terms of similar substance in
connection with any discussion of future operating or financial performance.
These forward-looking statements, including those which may impact the
forecasting of Carnival's net revenue yields, booking levels, pricing, occupancy
or business prospects, involve known and unknown risks, uncertainties and other
factors, which may cause Carnival's actual results, performances or achievements
to be materially different from any future results, performances or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions which may
impact levels of disposable income of consumers and the net revenue yields for
Carnival's cruise products; consumer demand for cruises and other vacation
options; other vacation industry competition; effects on consumer demand of
armed conflicts, political instability, terrorism, adverse media publicity and
the availability of air service; shifts in consumer booking patterns; increases
in vacation industry capacity, including cruise capacity; continued availability
of attractive port destinations; changes in tax laws and regulations; changes
and disruptions in equity, financial and insurance markets; Carnival's financial
and contractual counterparties' ability to perform; Carnival's ability to
implement its brand strategy, Carnival's ability to implement its shipbuilding
program and to continue to expand its business worldwide; Carnival's ability to
attract and retain shipboard crew; changes in foreign currency and interest
rates and increases in security, food, fuel, and insurance costs; delivery of
new ships on schedule and at the contracted prices; weather patterns and natural
disasters; unscheduled ship repairs and drydocking; incidents involving cruise
ships; impact of pending or threatened litigation; Carnival's ability to
successfully implement cost improvement plans; the continuing financial
viability and/or consolidation of Carnival's travel agent distribution system;
Carnival's ability to successfully integrate business acquisitions and changes
in laws and regulations.
These risks may not be exhaustive. Carnival operates in a continually changing
business environment, and new risks emerge from time to time. Carnival cannot
predict such risks nor can it assess the impact, if any, of such risks on its
business or the extent to which any risk, or combination of risks may cause
actual results to differ from those projected in any forward-looking statements.
Accordingly, forward-looking statements should not be relied upon as a
prediction of actual results. Carnival undertakes no obligation publicly to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
CARNIVAL PLANS TO FILE WITH THE US SECURITIES AND EXCHANGE COMMISSION IN
CONNECTION WITH ITS DUAL LISTED COMPANY PROPOSAL (WHICH INCLUDES A PARTIAL SHARE
OFFER TO P&O PRINCESS SHAREHOLDERS) A REGISTRATION STATEMENT ON FORM S-4/PROXY
STATEMENT ON SCHEDULE 14A, AS WELL AS A REGISTRATION STATEMENT ON FORM
S-4/STATEMENT ON SCHEDULE TO. BOTH REGISTRATION STATEMENTS WILL CONTAIN A
PROSPECTUS AND OTHER DOCUMENTS RELATING TO THE DUAL LISTED COMPANY PROPOSAL.
CARNIVAL PLANS TO MAIL TO SHAREHOLDERS OF P&O PRINCESS THE PROSPECTUS CONTAINED
IN THE REGISTRATION STATEMENT/SCHEDULE TO AFTER IT HAS BEEN DECLARED EFFECTIVE
BY THE SEC. CARNIVAL PLANS TO MAIL THE PROXY STATEMENT AND THE PROSPECTUS
CONTAINED IN THE REGISTRATION STATEMENT/PROXY STATEMENT TO ITS SHAREHOLDERS AT
OR ABOUT THE SAME TIME. THESE REGISTRATION STATEMENTS, THE PROSPECTUSES, THE
PROXY STATEMENT AND THE SCHEDULE TO WILL CONTAIN IMPORTANT INFORMATION ABOUT
CARNIVAL, P&O PRINCESS, THE DUAL LISTED COMPANY PROPOSAL AND RELATED MATTERS.
STOCKHOLDERS SHOULD READ THE REGISTRATION STATEMENTS, THE PROSPECTUSES, THE
PROXY STATEMENT, THE SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE DUAL LISTED COMPANY PROPOSAL CAREFULLY BEFORE THEY MAKE ANY
DECISION WITH RESPECT TO THE PROPOSAL. THE REGISTRATION STATEMENTS, THE
PROSPECTUSES, THE PROXY STATEMENT, THE SCHEDULE TO AND ALL OTHER DOCUMENTS FILED
WITH THE SEC IN CONNECTION WITH THE DUAL LISTED COMPANY PROPOSAL AND PRIOR
PRECONDITIONAL OFFER WILL BE AVAILABLE WHEN FILED FREE OF CHARGE AT THE SEC'S
WEB SITE, AT WWW.SEC.GOV. IN ADDITION, THESE DOCUMENTS WILL BE MADE AVAILABLE TO
SHAREHOLDERS FREE OF CHARGE BY WRITING TO TIM GALLAGHER AT CARNIVAL CORPORATION,
CARNIVAL PLACE, 3655 N.W. 87 AVENUE, MIAMI, FLORIDA, 33178-2428.
IN ADDITION TO THE REGISTRATION STATEMENTS, THE PROSPECTUSES, THE PROXY
STATEMENT, THE SCHEDULE TO AND THE OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE DUAL LISTED COMPANY PROPOSAL, CARNIVAL IS OBLIGATED TO FILE
ANNUAL, QUARTERLY AND CURRENT REPORTS, PROXY STATEMENTS AND OTHER INFORMATION
WITH THE SEC. PERSONS MAY READ AND COPY ANY REPORTS, STATEMENTS AND OTHER
INFORMATION FILED WITH THE SEC AT THE SEC'S PUBLIC REFERENCE ROOM AT 450 FIFTH
STREET, N.W., WASHINGTON, D.C. 20549. PLEASE CALL THE SEC at 1-800-732-0330 FOR
FURTHER INFORMATION ON THE PUBLIC REFERENCE ROOM. FILINGS WITH THE SEC ALSO ARE
AVAILABLE TO THE PUBLIC FROM COMMERCIAL DOCUMENT-RETRIEVAL SERVICES AND THROUGH
THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.
THE IDENTITIES OF THE PARTICIPANTS IN THE SOLICITATION OF CARNIVAL SHAREHOLDERS
FOR PURPOSES OF RULE 14a-12(a)(1) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND
THEIR INTERESTS IN THE OFFER AND TRANSACTIONS RELATED TO IT ARE SET FORTH IN
APPENDIX V TO THIS ANNOUNCEMENT.
APPENDIX I
PART A. CONDITIONS OF THE DLC TRANSACTION
Implementation of the DLC transaction will be subject to the conditions set out
in the Implementation Agreement being satisfied or waived by 30 September 2003
which include those summarised below:
1. Shareholder approvals
(a) The approval, at an extraordinary general meeting of P&O Princess, of
the resolutions required to implement the DLC transaction by not less
than three-quarters of the votes attaching to P&O Princess shares that
are cast at that meeting; and
(b) the approval, at a meeting of Carnival shareholders, of the
resolutions required to implement the DLC transaction by not less than
a majority of the votes attaching to the outstanding Carnival shares.
2. Approval of the P&O Princess circular by the UKLA
The UKLA approving the circular to P&O Princess shareholders convening the
P&O Princess EGM.
3. Effectiveness of all registration statements
All registration statements required by the SEC in connection with the DLC
transaction being declared effective by the SEC and remaining effective and
not being the subject of a stop order or other proceeding by the SEC to
suspend their effectiveness.
4. Regulatory approvals
Approval of the DLC transaction by the EC pursuant to EC Merger Regulation
4064/89.
5. No change in law or order restricting the DLC transaction
The absence of action, or threatened action, by any governmental enterprise
of competent jurisdiction that restrains, enjoins or otherwise prohibits
the completion or performance of, or materially adversely affects, the DLC
transaction and the other transactions contemplated by the Implementation
Agreement.
6. Effectiveness of each company's new constitutional documents
(a) The new P&O Princess memorandum and articles of association to be
adopted pursuant to the resolutions referred to in paragraph 1(a)
above having become effective; and
(b) the new Carnival articles and by-laws to be adopted pursuant to the
resolutions referred to in paragraph 1(b) above having become
effective.
7. Partial Share Offer
The Partial Share Offer becoming unconditional (save for Condition 1 of the
Partial Share Offer regarding the completion of the Implementation
Agreement).
P&O Princess' obligation to complete the DLC transaction is also subject to the
satisfaction or waiver of the following conditions precedent:
1. Representations and warranties and covenants of Carnival
The representations and warranties of Carnival set out in the
Implementation Agreement, as qualified therein by applicable materiality
thresholds, being true and correct as of the date of the Implementation
Agreement and as of the effective time of completion, and Carnival having
performed in all material respects its obligations under the Implementation
Agreement, and P&O Princess having received an officer's certificate of
Carnival to such effect. The representations and warranties cover amongst
other things share capital structure, authority to enter into agreements,
accuracy of published financial information, litigation and absence of
material change.
2. Carnival third party consents
Carnival having obtained all third party consents or approvals necessary to
complete the DLC transaction, other than those the failure of which to
obtain such consent or approval is not reasonably likely to have a material
adverse effect on Carnival or the completion of the transactions
contemplated by the Implementation Agreement.
3. Carnival special voting share
Carnival having issued the Carnival special voting share.
4. DLC documents
Each of the agreements required for the implementation of the DLC
transaction having been executed and delivered by the parties thereto
(other than P&O Princess) in the form agreed by the parties pursuant to the
Implementation Agreement.
Carnival's obligation to complete the DLC transaction is also subject to the
satisfaction or waiver of the following conditions precedent:
1. Representations and warranties and covenants of P&O Princess
The representations and warranties of P&O Princess set out in the
Implementation Agreement, as qualified therein by applicable materiality
thresholds, being true and correct as of the date of the Implementation
Agreement and as of the effective time of completion, and P&O Princess
having performed in all material respects its obligations under the
Implementation Agreement, and Carnival having received an officer's
certificate of P&O Princess to such effect. The representations and
warranties of P&O Princess cover the same matters as the Carnival
representations and warranties referred to above.
2. P&O Princess third party consents
P&O Princess having obtained all third party consents or approvals
necessary to consummate the DLC transaction, other than those the failure
of which to obtain such consent or approval is not reasonably likely to
have a material adverse effect on P&O Princess or the completion of the
transactions contemplated by the Implementation Agreement.
3. P&O Princess special voting share
P&O Princess having issued the P&O Princess special voting share.
4. DLC documents
Each of the agreements required for the implementation of the DLC
transaction having been executed and delivered by the parties thereto
(other than Carnival) in the form agreed by the parties pursuant to the
Implementation Agreement.
PART B. CONDITIONS OF THE PARTIAL SHARE OFFER
The Partial Share Offer will be conditional on:
1. the DLC transaction having been completed under the terms of the
Implementation Agreement;
2. all registration statements required by the SEC in connection with the DLC
proposal being declared effective by the SEC and remaining effective and
not being the subject of a stop order or other proceeding by the SEC to
suspend their effectiveness;
3. the NYSE agreeing to list the Carnival shares to be issued in connection
with the Partial Share Offer, subject only to official notice of issuance;
4. there not being outstanding any governmental action or court order which
would or might make the Partial Share Offer or the acquisition of any P&O
Princess shares void, illegal or unenforceable or materially and adversely
affect the assets, business, profits or prospects of any member of the
wider Carnival group or of any member of the wider P&O Princess group; and
5. all authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, permissions and approvals ("Authorisations")
necessary in any jurisdiction for, or in respect of, the Partial Share
Offer having been obtained, in terms and in a form reasonably satisfactory
to Carnival, from all necessary governmental entities and from any relevant
persons or bodies with whom any member of the wider Carnival group or the
wider P&O Princess group has entered into contractual arrangements and all
such Authorisations remaining in full force and effect at the time at which
the Partial Share Offer becomes unconditional in all respects.
Carnival reserves the right to waive, in whole or in part, either or both of
Conditions 4 and 5.
Invocation of Conditions 4 and 5 of the Partial Share Offer will be subject to
the approval of the Panel under Note 2 to Rule 13 of the Takeover Code.
APPENDIX II
CERTAIN TERMS OF THE DLC TRANSACTION
1. Joint Electorate and Class Rights Actions
Under the terms of the DLC documents, special voting arrangements will be
implemented so that the shareholders of Carnival and P&O Princess will vote
together as a single decision making body on Joint Electorate Actions which
will be all matters submitted to a shareholder vote other than those
designated as Class Rights Actions or resolutions on procedural or
technical matters. The relative voting rights of the P&O Princess shares
and Carnival shares will be determined by the equalisation ratio. Based on
an equalisation ratio of 1:1, each Carnival share will have the same voting
rights as one P&O Princess share on Joint Electorate Actions. Joint
Electorate Actions will include (i) the appointment, removal or re-election
of any director of Carnival or P&O Princess or both of them; (ii) if
required by law, the receipt or adoption of the annual accounts of both
companies; (iii) the appointment or removal or the auditors of either
company; (iv) a change of name by P&O Princess or Carnival, or both of
them; or (v) the implementation of a Mandatory Exchange described in
section 2 below; if put to shareholders.
In the case of certain actions in relation to which the two bodies of
shareholders may have divergent interests, to be known as Class Rights
Actions, the company wishing to carry out the Class Rights Action would
require the prior approval of shareholders in both companies each voting
separately as a class. The matters which will require approval as a Class
Rights Action will be (i) the voluntary liquidation, dissolution or winding
up of either company for which shareholder approval is required, (other
than as part of the liquidation of both companies at or around the same
time provided that such liquidation is not for the purpose of
reconstituting the business in one or more successor entities); (ii) the
adjustment to the equalisation ratio, other than in accordance with the
Equalisation and Governance Agreement; (iii) the sale, lease, exchange or
other disposition of all or substantially all of the assets of either
company other than a bona fide commercial transaction for valid business
purposes and at fair market value and not as part of a proposal, the
primary purpose of which is to collapse or unify the DLC structure; (iv)
any amendment, removal or alteration of any of the provisions of P&O
Princess' articles of association and Carnival's by-laws and articles which
entrench certain core provisions of the DLC structure; (v) any amendment or
termination of the principal agreements pursuant to which the DLC structure
is implemented; (vi) any change to the tax related provisions of the
Carnival articles that would be likely to trigger a mandatory exchange as
described in 2 below; and (vii) anything which the boards of both companies
agree should be approved as a Class Rights Action.
These voting arrangements will be implemented by embedding them in the DLC
documents and through the issue of a special voting share by each company.
2. Mandatory Exchange
In certain limited circumstances (described in (a) or (b) below) following
implementation of the DLC structure, P&O Princess shares, other than those
held by Carnival, may be subject to a mandatory exchange for Carnival
shares at the then prevailing equalisation ratio.
(a) If there is a change in applicable tax laws, rules or regulations or
their application or interpretation, and, based on a legal opinion and
after using commercially reasonable efforts to explore available
alternatives, and the P&O Princess board shall have reasonably
determined that:
. the change is reasonably likely to have a material adverse effect
on the DLC structure;
. it is reasonably likely that the material adverse effect would be
eliminated or substantially reduced by a mandatory exchange; and
. the material adverse effect would not be substantially eliminated
by any commercially reasonable alternative to a mandatory exchange;
then, with the approval of 66 2/3 per cent. of the shareholders of P&O
Princess and Carnival (voting on a Joint Electorate Action), the mandatory
exchange will occur.
(b) In addition, if:
. there is a change in the applicable non-tax laws, rules or
regulations or their application or interpretation, as a result of
which the P&O Princess board has reasonably determined and having
received a legal opinion, that it is reasonably likely that all or
a substantial portion of the DLC documents are unlawful, illegal or
unenforceable; or
. a court or other governmental entity has issued a ruling,
judgement, decree or order, which has been appealed to the extent
the P&O Princess board deems reasonably appropriate, holding that
all or a substantial portion of the DLC documents are unlawful,
illegal or unenforceable;
and the P&O Princess board, based on a legal opinion and after using
commercially reasonable efforts to explore the available alternatives to
the mandatory exchange, has reasonably determined that:
. the legal basis for the illegality or unenforceability would be
eliminated by a mandatory exchange;
. the illegality or unenforceability could not be eliminated by amendments
to the DLC documents that would not materially and adversely affect the
rights of the shareholders of P&O Princess and Carnival, taken together
or in relation to each other; and
. the change in law or the ruling, judgment, decree or order is reasonably
likely to be enforced in a way that will have a material adverse effect
on the DLC structure;
then, if the P&O Princess board decide, the mandatory exchange will occur.
3. Termination amount
If the Implementation Agreement is terminated:
. by either Carnival or P&O Princess because of the failure of P&O
Princess shareholders to approve the DLC transaction and a third-party
acquisition proposal for P&O Princess exists at the time of the P&O
Princess shareholders meeting; or
. by Carnival because:
. the P&O Princess board has withdrawn or adversely modified its
recommendation of the DLC transaction or has resolved to take any
such action or failed to reconfirm that recommendation upon request
by Carnival; or
. P&O Princess or the P&O Princess board has recommended a superior
third-party acquisition proposal for P&O Princess; or
. P&O Princess has breached its obligations under the Implementation
Agreement not to solicit another acquisition proposal for P&O
Princess;
then P&O Princess will be required to pay a termination amount to Carnival
equal to $49.4 million (being one per cent. of P&O princess' market
capitalisation at close of business on 7 January 2003)
if a third-party acquisition proposal with respect to P&O Princess is
completed within 18 months of the date of the Implementation Agreement.
If the Implementation Agreement is terminated:
. by either Carnival or P&O Princess because of the failure of
Carnival shareholders to approve the DLC transaction and a
third-party acquisition proposal for Carnival exists at the time of
the Carnival shareholders meeting; or
. by P&O Princess because:
. the Carnival board has withdrawn or adversely modified its
recommendation of the DLC transaction or has resolved to take
any such action or failed to reconfirm that recommendation upon
request by P&O Princess;
. Carnival or the Carnival board has recommended a superior
third-party acquisition proposal for Carnival; or
. Carnival has breached its obligations under the Implementation
Agreement not to solicit another acquisition proposal for
Carnival;
then Carnival will be required to pay a termination amount to P&O
Princess equal to $49.4 million (being one per cent. of P&O Princess'
market capitalisation at close of business on 7 January 2003) if a
third-party acquisition proposal with respect to Carnival is completed
within 18 months of the date of the Implementation Agreement.
APPENDIX III
DEFINITIONS
"Buy-Back" a purchase by Carnival of P&O
Princess shares, or a purchase by
P&O Princess of Carnival shares or
a purchase by P&O Princess of its
own shares or a reduction by P&O
Princess of its issued share
capital
"Carnival" Carnival Corporation
"Carnival group" Carnival, its subsidiaries and its
subsidiary undertakings
"Carnival shares" shares of common stock of Carnival
of $0.01 each
"Carnival Special Meeting" the special meeting of Carnival
shareholders to be convened for
the purpose of approving the DLC
transaction
"Class Rights Actions" actions specified as such due to
the divergent interests of
shareholders and which accordingly
require the prior approval of
shareholders in both companies,
each voting as a separate class
"competing proposal" the announcement by a third party
of a firm intention (whether or
not subject to a pre-condition) to
make an offer, in accordance with
the Takeover Code, for P&O
Princess (including a proposal for
a DLC with P&O Princess) which
offer, in Carnival's reasonable
opinion, acting in good faith and
after consultation with its
financial advisers, the nature of
such advice having been
communicated to P&O Princess, is
likely to be more attractive to
P&O Princess shareholders than the
DLC transaction
"Combined Group" the P&O Princess group and the
Carnival group after the DLC
structure has been implemented
"Conditions" the conditions set out in Part A
or Part B of Appendix I of this
announcement, as the case may be
"DLC" dual listed company
"DLC documents" The documents required to
implement the DLC transaction
which will include the
Implementation Agreement, the
Equalisation and Governance
Agreement, Deeds of Guarantee, the
special voting deed, the Carnival
voting agreement, the amended
memorandum and amended articles of
association of P&O Princess, the
third amended and restated
articles of incorporation of
Carnival and the amended and
restated by-laws of Carnival
"DLC proposal" Carnival's proposal to form a dual
listed company structure with P&O
Princess and to make the Partial
Share Offer
"DLC structure" the dual listed company structure
created by the DLC documents
"DLC transaction" the combination of Carnival and
P&O Princess under a dual listed
company structure
"EC" the European Commission
"Equalisation and Governance Agreement" the agreement to be entered into
between P&O Princess and Carnival
pursuant to the Implementation
Agreement specifying the
equalisation ratio and various
other matters relating to the DLC
transaction
"equalisation ratio" the ratio of one P&O Princess
share to that number of Carnival
shares that have the same rights
to distributions of income and
capital and voting rights as one
P&O Princess share
"FTC" the US Federal Trade Commission
"Implementation Agreement" the offer and implementation
agreement entered into between
Carnival and P&O Princess on 8
January 2003 setting out the terms
and conditions for the
implementation of the DLC
structure and the Partial Share
Offer
"Joint Electorate Actions" actions in respect of which
holders of P&O Princess shares and
Carnival shares will effectively
vote as a unified constituency
"London Stock Exchange" London Stock Exchange plc
"Merrill Lynch" Merrill Lynch International
"NYSE" the New York Stock Exchange, Inc.
"Panel" the Panel on Takeovers and Mergers
"Partial Share Offer" the proposed partial offer to be
made to acquire up to 20 per cent.
of P&O Princess' share capital on
the basis of 0.3004 Carnival
shares for each P&O Princess share
"P&O Princess" P&O Princess Cruises plc
"P&O Princess ADSs" American depositary shares, each
representing, before the completion of the
DLC transaction, four underlying P&O
Princess shares
"P&O Princess EGM" the extraordinary general meeting of P&O
Princess to be convened for the purpose of
approving the DLC transaction
"P&O Princess group" P&O Princess, its subsidiaries and its
subsidiary undertakings
"P&O Princess shares" prior to the implementation of the DLC
transaction, the existing unconditionally
allotted or issued and fully paid ordinary
shares of US$0.50 each in the capital of P&O
Princess (including those represented by P&O
Princess ADSs but not, for avoidance of
doubt, such ADSs) and any further such
shares which are unconditionally allotted or
issued and fully paid before completion of
the DLC transaction (or such earlier date(s)
as Carnival may, subject to the Takeover
Code, determine), including any such shares
so unconditionally allotted or issued
pursuant to the exercise of options granted
under the P&O Princess employee share
incentive plans and, after the
implementation of the DLC structure, the
unconditionally allotted or issued and fully
paid ordinary share of US$1.66 each in the
capital of P&O Princess
"Royal Caribbean" Royal Caribbean Cruises Ltd.
"SEC" the United States Securities and Exchange
Commission
"share exchange offer" the pre-conditional offer for P&O Princess
announced by Carnival on 7 February 2002
"special voting share" the special voting shares to be issued by
each of P&O Princess and Carnival to enable
P&O Princess shareholders and Carnival
shareholders to vote on a combined basis at
meetings of both companies
"Takeover Code" the City Code on Takeovers and Mergers
"UBS Warburg" UBS AG, acting through its business group
UBS Warburg or, where appropriate, its
subsidiary, UBS Warburg Ltd.
"UKLA" the United Kingdom Listing Authority
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"US" or "United States" the United States of America, its
territories and possessions, any state of
the United States of America and the
District of Columbia and all other areas
subject to its jurisdiction
"wider Carnival group" Carnival and any of its subsidiary
undertakings or any associated undertaking
or company of which 20 per cent. or more of
the voting capital is held by the Carnival
group or any partnership, joint venture,
firm or company in which any member of the
Carnival group may be interested
"wider P&O Princess group" P&O Princess and any of its subsidiary
undertakings or any associated undertaking
or company of which 20 per cent. or more of
the voting capital is held by the P&O
Princess group or any partnership, joint
venture, firm or company in which any member
of the P&O Princess group may be interested
"(Pounds)" or "pounds sterling"
or "pence" or "p" the lawful currency of the United Kingdom
"$" or "US dollars" or "cents" the lawful currency of the United States of
America
APPENDIX IV
SOURCES AND BASES OF INFORMATION
Unless otherwise stated: (i) information relating to Carnival has been extracted
from the relevant published audited financial statements and SEC filings of
Carnival; and (ii) information relating to P&O Princess has been extracted from
the relevant published annual reports and accounts, interim reports and SEC
filings of P&O Princess.
Share prices for Carnival and P&O Princess are taken from Bloomberg.
The (Pounds)1:$1.611 exchange rate is the World Market Rate as published in the
Financial Times on 7 January 2003.
The DLC "look through" value is based upon the Carnival closing price of $25.77
on 7 January 2003 and the 693,008,745 50 cent ordinary shares in issue as per
the P&O Princess blocklisting interim review dated 21 May 2002.
The holdings of the equity in the Combined Group are based on 586,776,338 one
cent Carnival ordinary shares in issue as per the 10Q of Carnival dated 31
August 2002 and the 693,008,745 50 cent ordinary shares in issue as per the P&O
Princess blocklisting interim review dated 21 May 2002.
The termination amount is based upon the P&O Princess closing price on 7 January
2003 of 442.5 pence and the 693,008,745 50 cent ordinary shares in issue as per
the P&O Princess blocklisting interim review dated 21 May 2002.
APPENDIX V
PARTICIPANTS INVOLVED IN SOLICITATION
The participants in the solicitation of Carnival shareholders include the
following directors of: Micky Arison (also Chairman of the board of Directors
and Chief Executive Officer of Carnival), Shari Arison, Maks L. Birnbach,
Richard G. Capen, Jr., Robert H. Dickinson (also President and Chief Operating
Officer of Carnival Cruise Lines), Arnold W. Donald, James M. Dubin, Howard S.
Frank (also Vice Chairman of the board of Directors and Chief Operating Officer
of Carnival), A. Kirk Lanterman (also Chairman and Chief Executive Officer of
Holland America Line-Westours, Inc.), Modesto A. Maidique, Stuart Subotnick,
Sherwood M. Weiser, Meshulam Zonis and Uzi Zucker.
In addition, the following persons may be participating in the solicitation:
Gerald R. Cahill (Senior Vice President Finance and Chief Financial Officer of
Carnival), Kenneth D. Dubbin (Vice President, Corporate Development of
Carnival), Lowell Zemnick (Vice President and Treasurer of Carnival), Arnaldo
Perez (Senior Vice President, General Counsel and Secretary of Carnival),
Elizabeth Roberts (Director Investor Relations of Carnival) and Tim Gallagher
(Vice President of Public Relations of Carnival Cruise Lines).
As of the date of this communication:
.. Micky Arison beneficially owns approximately 38.9 per cent. of the
outstanding common stock, par value $0.01 per share ("Common Stock"), of
Carnival;
.. James M. Dubin, by virtue of being the sole shareholder of JMD Delaware,
Inc. (the trustee of the Continued Trust for Shari Arison Dorsman, the
Continued Trust for Micky Arison, the Continued Trust for Michael Arison,
the MA 1997 Holdings Trust, the Marylin B. Arison Irrevocable Delaware
Trust, and the 1999 Irrevocable Delaware Trust for Michael Arison), JMD
Protector, Inc. (the protector of the Ted Arison 1994 Irrevocable Trust for
Shari No.1 and the Ted Arison 1992 Irrevocable Trust for Lin No. 2) and
Balluta Limited (the trustee of the Shari Arison Irrevocable Guernsey
Trust), may be deemed to own beneficially approximately 24.9 per cent. of
the outstanding Common Stock, as to which he disclaims beneficial
ownership; and
.. No other possible participant in the solicitation listed above beneficially
owns greater than 1 per cent. of the outstanding Common Stock.