Princess stock hits choppy waters

SHARES in P&O Princess, the luxury cruise line, fell after the Takeover Panel was asked to rule against its planned £4.8bn merger with US rival Royal Caribbean.

Carnival, the world's biggest cruise operator, is attempting to block the deal after P&O rejected its own takeover approach. Carnival claims P&O contravened panel rules by inserting a 'poison pill' clause aimed at freezing out other bidders.

It was unclear whether the panel would get involved. It recently decided it had no control over 'dual-listed' companies. P&O and Royal would be quoted in London and New York.

But uncertainties over the outcome of what looks like a prolonged battle left P&O 14p easier at 364p. One analyst said: 'I expect the price to gyrate over the next few weeks.'

P&O chief executive Peter Ratcliffe must now compete with Carnival to win the hearts of major institutions before January, when shareholders vote on the Royal proposal. Carnival is demanding the meeting be postponed, so its own offer, which would value P&O at £3.2bn, can be considered.