P&O Princess turns down Carnival's new hostile bid

P&O Princess Cruises Plc rejected an increased $5.4 billion takeover bid from Carnival Corp., saying the No. 1 cruise line's proposal is unlikely to clear antitrust hurdles, though the price is "realistic."

Carnival is the largest operator in the United States and Europe, while Royal Caribbean Cruises Ltd., with whom P&O Princess is trying to combine, is No. 2 in the United States and has a "relatively small European presence," London-based P&O Princess said.

P&O Princess Chief Executive Peter Ratcliffe said P&O Princess will go ahead Thursday with a vote on its $7.4 billion Royal Caribbean combi- nation. Carnival has said more than 20 percent of P&O Princess shareholders have said they'll seek to postpone the vote.

Carnival's latest bid for P&O Princess is an all-stock offer of 0.3004 Carnival shares for each P&O Princess share.

Advertiser parent's profits decline 15.8% amid slump

NEW YORK >> Gannett Co., the largest newspaper publisher in the country and the parent of the Honolulu Advertiser, reported a 15.8 percent decline in fourth-quarter net profits yesterday as an advertising slump and the slow economy dragged down results.

Gannett, which publishes 95 daily newspapers in the United States including USA Today, earned $248.4 million, or 93 cents a share, down from $294.9 million, or $1.11 a share, in the year-ago period. The results beat analysts' forecasts by a penny. The year-ago period included one more week than the most recent fourth quarter. Revenues fell 14.3 percent to $1.62 billion from $1.89 billion in the fourth quarter of 2000.

Gap's new return policy may wear on customers

SAN FRANCISCO >> Gap Inc., owner of the Gap, Banana Republic and Old Navy stores, is tightening its merchandise return policy, and analysts say that may alienate customers.

Old Navy patrons who don't have a receipt for a shirt, for example, can only exchange it for another color or size, not another product, Bloomberg News reported. At Banana Republic, no receipt means no return for any reason. The new terms took effect Monday, Gap said.

Gap has stores of all three brands in Hawaii.

Moves such as this discourage returns, save cashiers time and help reduce costs for retailers, analysts said. But they rise turning off customers and eventually hurt sales. Gap sales have fallen for 21 months.

"At this point, they should be happy just to get anybody to walk into a store," said analyst Marty Bukoll of Northern Trust Corp. "What they need to do is make their customers happy, not irritate them."

Mobile phones set to top fixed lines at 1 billion

GENEVA >> The number of mobile phones grew by nearly 40 percent last year worldwide and is poised to exceed 1 billion -- soon overtaking the number of fixed lines, the International Telecommunication Union today.

There were 1.045 billion fixed lines at the end of 2001, against nearly one billion mobile phones, according to ITU spokesman Gary Fowlie. "Given that the growth rate for mobile phones was 38 percent last year, it won't take long. We may have already passed it," he said.