Filing under Rule 425 under
the Securities Act of 1933
and deemed filed under Rule 14d-9(a)
of the Securities Exchange Act of 1934
Filing by: P&O Princess Cruises plc
Subject Company: P&O Princess Cruises plc
SEC File No. of Princess: 001-15136
On January 8, 2003, P&O Princess Cruises plc posted the following Questions and
Answers with respect to the DLC transaction with Carnival Corporation on its
website, www.poprincesscruises.com:
Amended January 8th 2003
Shareholder FAQs for the website and hotline
What is going on?
. On 24 October 2002, Carnival announced a pre-conditional proposal to
combine with P&O Princess through a dual listed company structure.
. On 8 January 2003, the P&O Princess Board announced that it agreed and
recommended Carnival's proposal. Accordingly, P&O Princess and
Carnival have entered into an implementation agreement to effect the
DLC combination.
. You should read these questions with the full text of the board's
announcement which is also available in the transaction area of our
website (at www.poprincesscruises.co.uk).
What is the Carnival DLC proposal?
. Carnival's proposal is to combine with P&O Princess through a DLC
structure on the basis of one P&O Princess share having economic and
voting rights equivalent to 0.3004 Carnival shares. P&O Princess
shareholders will hold approximately 26 per cent. of the equity of the
Combined Group, and the Carnival shareholders will hold approximately
74 per cent..
. In connection with the DLC transaction, Carnival is making a partial
share offer for up to 20 per cent., in aggregate, of P&O Princess
shares on the same economic basis. The Partial Share Offer enables P&O
Princess shareholders to elect to exchange P&O Princess 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 tendered.
Why are you recommending it now?
. The joint venture agreement with Royal Caribbean Cruises was
terminated on 1 January 2003 and the recommendation of the DLC
transaction by the Board and the signing of the Implementation
Agreement satisfies all the remaining pre-conditions to Carnival's DLC
proposal.
. The P&O Princess Board believes that Carnival's DLC offer is a highly
attractive opportunity for all P&O Princess shareholders. The DLC
structure:
. allows all P&O Princess shareholders to retain their
exposure to the global cruise industry;
. creates the world's largest cruise vacation group;
. combines complementary well-known brands operating globally;
. provides the potential to generate significant synergies;
. creates a strong balance sheet and cash generation.
. The P&O Princess board believes that the proposed DLC transaction
is in the best interests of P&O Princess and its shareholders as
a whole.
What is the DLC structure? Why does P&O Princess want to use a DLC structure to
combine with Carnival?
. The DLC structure is a means of enabling P&O Princess and
Carnival to combine their management and operations as if they
were a single economic enterprise, while retaining their separate
legal entities. 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.
. The existing primary listings of P&O Princess on the London Stock
Exchange and Carnival on the New York Stock Exchange will be
maintained and the existing full index participations of P&O
Princess in the FTSE 100 and Carnival in the S&P 500 are expected
to be retained.
. 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.
Can I receive cash instead?
. No, you cannot elect to receive cash for your shares either under
the DLC transaction or the Partial Share Offer.
Can I choose whether to hold UK or US listed shares?
. The Partial Share Offer enables P&O Princess shareholders to
elect to exchange P&O Princess shares (which are expected to
remain listed on the London Stock Exchange) for Carnival shares
(which are expected to remain listed on the NYSE). The Partial
Share Offer is being made for up to 20 per cent., in aggregate,
of P&O Princess shares.
Does the DLC transaction still need to be approved by regulatory authorities?
Could the regulatory authorities block the DLC transaction?
. Carnival has previously received clearance from the European
Commission and the U.S. Federal Trade Commission for the
combination of its business with that of P&O Princess, pursuant
to the share exchange offer.
. P&O Princess and Carnival have been advised that the U.S. Federal
Trade Commission clearance is also applicable to a combination
accomplished pursuant to the DLC transaction and, therefore, that
Carnival is not required to undergo any further antitrust
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. P&O Princess
and Carnival 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, P&O Princess
and Carnival expect the DLC transaction to be cleared by the EC
during the first quarter of 2003.
Do I need to take any action?
. You need not take any action at this time. P&O Princess and
Carnival currently expect the relevant documentation will be
posted to shareholder in late February/early March following
review by the SEC and the UKLA at which time you will be
requested to take further action to approve the DLC transaction.
Will I get the chance to vote on the DLC transaction?
. Yes. You will receive detailed information about the transaction
in late February or early March. This will include details of the
P&O Princess Extraordinary General Meeting (EGM) at which P&O
Princess shareholders will be entitled to vote.
When will there be an EGM, and can I attend?
. P&O Princess currently expects to hold its EGM in late
March/early April. Full details will be contained in the
documentation sent to P&O Princess shareholders.
. All shareholders are entitled to attend the EGM or to vote at the
EGM by proxy.
. If you are in any doubt about what action you should take, you
should consult your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser authorised, in
the UK, under the Financial Services and Markets Act 2000.
What role will Lord Sterling take in the Combined Group?
. Lord Sterling was due to retire last October, and had agreed to
continue as Chairman until the DLC transaction is completed.
. He will be retiring from P&O Princess and stepping down from the
Board once the DLC transaction completes.
Could I still vote for the Royal Caribbean DLC combination? Will the Chairman
still be reconvening the EGM?
. No. The Board has withdrawn its recommendation of the Royal
Caribbean DLC combination. The Chairman has confirmed he will not
be reconvening the EGM which was adjourned on 14 February 2002.
What is the `look through value'?
. The "look through" value (of 481 pence per P&O Princess share
published in Carnival's announcement of 8 January 2003) is
calculated by dividing the Carnival share price by the US dollar
exchange rate on 7 January 2003 and multiplying by the share
exchange ratio of 0.3004.
What is the Partial Share Offer and how will it work?
. Carnival is making the Partial Share Offer in connection with the
DLC transaction. The Partial Share Offer enables P&O Princess
shareholders to elect to exchange P&O Princess 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 tendered.
. 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. If acceptances of the Partial Share Offer are
received in respect of in excess of 20 per cent. of P&O Princess'
issued share capital, acceptances will be scaled down.
. Further details of the Partial Share Offer are contained in the
announcement, a copy of which is available on our website.
How do I decide whether or not to accept the Partial Share Offer?
. We are unable to provide individual investment advice. If you are
in any doubt about the Partial Share Offer or the action you
should take, you should seek your own financial advice from your
stockbroker, bank manager, solicitor, accountant or other
independent financial adviser authorised, in the UK, under the
Financial Services and Markets Act 2000.
Will P&O Princess need 75% shareholder approval to implement this DLC
transaction as well?
. Yes. P&O Princess shareholders must approve the resolution
required to implement the DLC transaction by not less than 75% of
the votes that are cast at the P&O Princess EGM voting in favour
of the DLC transaction.
Shareholding questions
What action do I need to take as a shareholder in P&O Princess Cruises?
. Shareholders need take no action at this time. The company will
write to you when you need to take action.
. If you are in any doubt about what action you should take, you
should consult your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser authorised, in
the UK, under the Financial Services and Markets Act 2000.
Will the two types of shares receive the same dividend payment?
. 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 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.
Will Carnival maintain P&O Princess' ADS shares in the US?
. Carnival has indicated it intends to retain the ADSs on the New
York Stock Exchange for the foreseeable future.
What if I hold my shares through Crest?
. Following implementation of the DLC transaction, your P&O
Princess shares would remain eligible to be held through Crest.
I am an employee shareholder - how does this affect me?
. 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.
How will this affect my tax position?
. We are not able to offer personal tax advice. If you have any tax
queries, you should seek your own personal financial advice from
your stockbroker, bank manager, solicitor, accountant or other
independent professional adviser authorised, in the UK, under the
Financial Services and Markets Act 2000 immediately.
How will a DLC transaction with Carnival affect my dividends?
. 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 5% higher.
Where can I get more information?
. You will be posted documents detailing the DLC transaction and
Partial Share Offer in late February/early March following review
by the SEC and UKLA. All documentation and announcements issued
by P&O Princess Cruises in relation to recent corporate
activities can be accessed through the "transaction" area of the
P&O Princess website, located at www.poprincesscruises.com.
Alternatively, you can call the shareholder hotline on 0800 279
8886, or you can contact the company secretary on 020 7805 1200.
Customers
Is Carnival planning to sell some of P&O Princess' brands?
. The quality of customer service and operating standards will
continue to be a high priority for both companies, and our
customers will continue to be served to the highest standards.
. Carnival has stated that one of the benefits of the DLC
transaction is the creation of a leading global vacation and
leisure company with a wide portfolio of complementary brands,
which will enable the Combined Group to offer a wider range of
vacation choices to its customers.
What changes to itineraries are planned?
. We cannot give any specific details at this point in time as we
have not yet implemented a transaction. The Combined Group would
be committed to offering a wide range of vacation choices to its
customers.
Will the P&O Cruises and the Princess brands be retained? Will they be affected
by the name change mentioned in the release?
. The company will continue to invest in its well-known brands.
. The announcement explains that P&O Princess Cruises plc will
change its name to Carnival (UK) plc. This will have no impact on
the operating subsidiaries that will continue to trade under
their current brand names.
FORWARD LOOKING STATEMENTS AND RESPONSIBILITY
================================================================================
CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain statements contained in this announcement are "forward-looking
statements" that involve risks, uncertainties and assumptions with respect to
P&O Princess and Carnival and their respective subsidiaries and the Combined
Group, including certain statements concerning the transactions described
herein, profit forecasts, working capital, future results, plans and goals and
other events which have not yet occurred. These statements are intended to
qualify for the safe harbours from liability provided by Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended. You can find many (but not all) of these
statements by looking for words like "will", "may", "believes", "expects",
"anticipates", "forecast", "future", "intends", "plans" and "estimates" and for
similar expressions. Because forward-looking statements involve risks and
uncertainties, there are many factors that could cause the transactions
described herein not to occur and/or each of P&O Princess', Carnival's and the
Combined Group's actual results, performance or achievements to differ
materially from those expressed or implied in this document. These factors
include, but are not limited to, the following: regulatory and shareholder
approvals of the DLC transaction; achievement of expected benefits from the DLC
transaction; risks associated with the combination of Carnival's and P&O
Princess' businesses by means of a DLC structure; liquidity and index inclusion
as a result of the implementation of the DLC structure, including a possible
mandatory exchange; risks associated with the uncertainty of the tax status of
the DLC structure; general economic and business conditions which may impact
levels of disposable income of consumers and the net revenue yields for the
cruise products of Carnival, P&O Princess and the Combined Group; conditions in
the cruise and land-based vacation industries, including competition from other
cruise ship operators and other vacation alternatives and increases in cruise
ship and land based vacation alternative capacities; the impact of operating
internationally; the international political and economic climate, armed
conflict, terrorist attacks and other world events and negative media publicity
and their impact on the demand for cruises; accidents and other incidents at sea
affecting the health, safety and security of passengers; the ability of
Carnival, P&O Princess and the Combined Group to implement their shipbuilding
programs and brand strategies and to continue to expand their businesses
worldwide; the ability of Carnival, P&O Princess and the Combined Group to
attract and retain shipboard crew; the ability to obtain financing on terms that
are favourable or consistent with Carnival's, P&O Princess' and the
Combined Group's expectations; the impact of changes in operating and financing
costs, including changes in foreign currency and interest rates and security,
fuel, food and insurance costs; changes in the tax, environmental and other
regulatory regimes under which each company operates; and the ability of a small
group of shareholders to effectively control the outcome of shareholder voting.
In addition, the paragraph entitled "risk factors" in P&O Princess' annual
report on Form 20-F filed with the US Securities and Exchange Commission
contains important cautionary statements and a discussion of many of the factors
that could materially affect the accuracy of P&O Princess' forward-looking
statements and/or adversely affect its business, results of operations and
financial position, which statements are incorporated herein by reference.
P&O Princess cautions the reader that these risks may not be exhaustive.
Carnival and P&O Princess operate in a continually changing business
environment, and new risks emerge from time to time. P&O Princess cannot predict
such risks nor can it assess the impact, if any, of such risks on the businesses
of Carnival and P&O Princess 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. Subject to any continuing
obligations under applicable law or any relevant listing rules, P&O Princess
expressly disclaims any obligation to disseminate, after the date of this
document, any updates or revisions to any such forward-looking statements to
reflect any change in expectations or events, conditions or circumstances on
which any such statements are based.
P&O PRINCESS PLANS TO FILE REGISTRATION STATEMENTS ON FORM F-4 WITH THE US
SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE DEEMED EXCHANGE OF P&O
PRINCESS SHARES AND ISSUANCE OF THE SPECIAL VOTING SHARE IN CONNECTION WITH THE
DLC TRANSACTION, AND CARNIVAL HAS INDICATED THAT IT PLANS TO FILE A REGISTRATION
STATMENT ON FORM S-4 IN CONNECTION WITH THE PARTIAL SHARE OFFER. THE FORMS F-4
WILL CONTAIN A PROSPECTUS AND OTHER DOCUMENTS RELATING TO THE DEEMED EXCHANGE OF
P&O PRINCESS SHARES AND/OR THE DLC TRANSACTION, AND THE FORM S-4 WILL CONTAIN A
PROSEPCTUS AND OTHER DOCUMENTS RELATING TO THE PARTIAL SHARE OFFER AND/OR THE
DLC TRANSACTION. P&O PRINCESS PLANS TO MAIL A CIRCULAR WITH RESPECT TO THE DLC
TRANSCATION TO SHAREHOLDERS OF P&O PRINCESS AFTER THE FORM F-4 HAS BEEN DECLARED
EFFECTIVE BY THE SEC, AND CARNIVAL HAS INDICATED THAT IT PLANS TO MAIL THE
PROSPECTUS CONTAINED IN THE FORM S-4 TO SHAREHOLDRES AFTER THE FORM S-4 HAS BEEN
DECLARED EFFECTIVE BY THE SEC. THE CIRCULAR, FORM F-4, FORM S-4 AND THE
PROSPECTUSES WILL CONTAIN IMPORTANT INFORMATION ABOUT P&O PRINCESS, CARNIVAL,
THE DEEMED EXCHANGE OF P&O PRINCESS SHARES, THE DLC TRANSACTION, THE PARTIAL
SHARE OFFER AND RELATED MATTERS. INVESTORS AND STOCKHOLDERS SHOULD READ THE
CIRCULAR, FORM F-4, FORM S-4, THE PROSPECTUSES AND THE OTHER DOCUMENTS FILED
WITH THE SEC IN CONNECTION WITH THE DEEMED EXCHANGE OF P&O PRINCESS SHARES AND
THE PARTIAL SHARE OFFER CAREFULLY BEFORE THEY MAKE ANY DECISION WITH RESPECT TO
THE DLC TRANSACTION AND THE PARTIAL SHARE OFFER. THE CIRCULAR, FORM F-4, FORM
S-4, THE PROSPECTUSES, AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION
WITH THE DLC TRANSACTION WILL BE AVAILABLE WHEN FILED FREE OF CHARGE AT THE
SEC'S WEB SITE, AT WWW.SEC.GOV. IN ADDITION, THE PROSPECTUS AND ALL OTHER
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE DLC TRANSACTION WILL BE MADE
AVAILABLE TO INVESTORS FREE OF CHARGE BY WRITING TO P&O PRINCESS CRUISES PLC,
11-12 CHARLES II STREET, LONDON SW1Y 4QU, ENGLAND, ATTENTION COMPANY SECRETARY.
IN ADDITION TO THE FORM F-4, THE PROSPECTUS AND THE OTHER DOCUMENTS FILED WITH
THE SEC IN CONNECTION WITH THE DEEMED EXCHANGE OF P&O PRINCESS SHARES IN
CONNECTION WITH THE DLC TRANSACTION, P&O PRINCESS IS OBLIGATED TO FILE ANNUAL
REPORTS 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 ARE ALSO AVAILABLE TO THE PUBLIC FROM COMMERCIAL
DOCUMENT-RETRIEVAL SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC AT
WWW.SEC.GOV.