NCL Shares Fall As Star Cruises Buys Stake

Shares in Norwegian cruise operator NCL Holding ASA fell six percent early last Wednesday after Singapore's Star Cruises bought a 20.6 percent stake but said it did not plan to bid for the entire company. NCL, which is currently the target of a hostile takeover from U.S. cruise giant Carnival Corp., said it had asked to meet Star to discuss possible options. "NCL has asked for a meeting with Star to map out what options the acquisition holds, compared with other possibilities the company is working on," NCL said. Star and related companies have now bought 51.4 million NCL shares, corresponding to 20.6 percent of the share capital. Star said that it had no intention at present to make any offer for NCL to counter the hostile bid from Carnival Corp. NCL officials rejected the bid, saying that Carnival, which has offered $880 million for NCL shares, was trying to buy NCL cheap after it suffered a year marred by two accidents with its liners. "This has been an extraordinary year. Carnival wants to buy in an extraordinary situation, not on what is to come," Chairman Kristian Siem said. Siem has said that it would be a "waste of time" even to discuss Carnival's bid, of 30 crowns per share. Carnival officials say the total value of the deal, including assuming debt, is $1.7 billion. When NCL, the world's fourth largest cruise operator, announced that it was in talks with Singapore's Star Cruises, it spurred speculation about a possible bidding war. Chief Executive Geir Aune said that Carnival's total stock market capitalization, when it announced its bid, rose three or four times the amount it was bidding for NCL. "The price for Carnival has fallen after it was known that we are talking to Star Cruises. We think that this is a good enough illustration" that the price bid was too low, he said. NCL officials said that the company has also been in contact with other companies interested in the firm. "We have been approached by several companies," Aune said. "We have no problem in maintaining an independent status and continue to grow as a strong company. However, if there is a good opportunity that makes sense for both parties...we are of course willing to look at those type of situations," he said. Carnival plans to allow its tender to buy NCL to expire on the Dec. 22 deadline without making any adjustments. NCL recently forecast a surge in pre-tax profits for 2000, estimating that pre-tax profits would surge to $92 million, from $40 million in 1999. Aune said that forecast 1999 profits included extraordinary items of about $20 million after the Norwegian Sky ran aground in Canada in September and the Norwegian Dream collided with a cargo ship off Britain in August. He said all costs with the liners had now been taken. NCL officials said that bookings already accounted for 50 percent of budgeted revenues for 2000. And as of Dec. 6, net ticket revenue per capacity day for the first quarter 2000 was $75 against $65 for 1999 at the same date last year. "For 2000 the company expects an operating profit before depreciation and charter hire of $236 million and a profit before tax of $92 million," officials said. Siem said that NCL expects rising profits even though 1999 was boosted by strong bookings for New Year cruises for the millennium. "There's no doubt that millennium cruises gave very good booking figures in the fourth quarter last year," he said. - (Reuters)