CRUISE giant P&O Princess is likely to face a £91.9m bill by succumbing to a near year-long takeover campaign by US rival Carnival.

Cunard owner Carnival has been trying to break up P&O Princess's preferred merger of equals with Royal Caribbean since it was unveiled in November last year.

Although successive approaches were rebuffed the American company finally won over P&O Princess with a £3.5b offer to create a dual-listed company.

Shareholders will receive one Carnival share for every 3.3289 P&O Princess shares and the UK group welcomed the bid.

But the all-share deal means shareholders will now not receive any cash for their shares - earlier bids tabled by Carnival were cash and share offers.

But the deal means that P&O Princess will have to fork out £40.3m poison-pill payment after withdrawing its backing for the Royal Caribbean deal.

On top of that, costs of £35.5m are now likely to be written off as the Royal Caribbean merger has been scuppered.

With further adviser fees of around £16.7 million due, dependent on a deal with either party completing, the talks could cost P&O Princess a hefty £91.9 million.

To avoid paying Royal Caribbean any further penalties, P&O Princess cannot recommend Carnival's offer to shareholders until January 1.

Should investors then back the deal, completion is expected in the first quarter of 2003. European and US competition authorities have already given the deal clearance.

Richard Fain, chairman and chief executive of Royal Caribbean, said: "Clearly, we regret that the board of P&O Princess is taking this action.

"We remain as convinced as ever that the pairing of our two companies would be a great partnership and a great business. Ultimately, it is the shareholders of P&O Princess who must decide what is best for their company.''

Looking forward, the combined group is likely to be called Carnival in both the US and UK although P&O Princess brands including Southampton-based P&O Cruises are unlikely to disappear.

Nor are significant job losses expected.