Change is inevitable when Regent is under Norwegian umbrella but will it be GOOD or BAD?

(Reuters) - Norwegian Cruise Line Holdings Ltd NCHL.O, the world's third largest cruise operator, is in advanced talks to acquire peer Prestige Cruises International Inc for around $3 billion, according to people familiar with the matter.

A deal would give Norwegian Cruise, a company with a market value of $6.8 billion, access to Prestige Cruises' luxury cruise ships and affluent clientele as it competes with bigger rivals Royal Caribbean Cruises Ltd (RCL.N) and Carnival Corp (CCL.N).

An agreement may be announced as early as this week, the sources said on Sunday, cautioning that the talks could still fall apart. The owner of Prestige Cruises, private equity firm Apollo Global Management LLC (APO.N), also owns a 20 percent stake in Norwegian Cruise.

The sources asked not to be identified because the negotiations are not public. Norwegian Cruise and Prestige Cruises representatives did not respond to requests for comment, while an Apollo spokesman declined to comment.

Miami-based Norwegian Cruise operates 13 cruise ships in routes spanning North America, the Mediterranean, the Baltic, Central America and the Caribbean. It had revenues of $2.57 billion in 2013, up 13 percent from 2012.

Prestige Cruises, also based in Miami, operates under the Oceania and Regent brands, which together have eight cruise ships traveling to Scandinavia, Russia, the Mediterranean, North America, Asia, Africa and South America. It posted revenues of $1.2 billion in 2013, up 6 percent from the year earlier.

The $29 billion cruise industry is expected to benefit in the coming years from the rise of the middle class in emerging economies such as China and India. Companies are racing to position themselves as the cruise operators of choice for these new customers.

Prestige Cruises registered with U.S. regulators for an initial public offering in January 2014. Apollo has been the company's majority shareholder following an $850 million deal in 2007.

Norwegian Cruise was created in its current form in 2000 through a merger with a cruise operator owned by Genting Bhd (GENT.KL), the leisure and casino conglomerate controlled by Malaysian billionaire Lim Kok Thay. Apollo made a $1 billion investment in Norwegian Cruise in 2008.

Norwegian Cruise went public in January 2013. Genting had a 28 percent stake, Apollo had a 20 percent stake and private equity firm TPG Capital LP had an 8 percent stake in the company as of the end of June, according to a regulatory filing.

Carnival, Royal Caribbean Cruises and Norwegian Cruise together account for 82 percent of the North American cruise passenger berth capacity, according to Prestige Cruises' initial public offering registration document.

Thanks Jim. If this should come about I wonder what changes would occur ??

It happened. Wonder what it will mean.

Although it's been years, Norwegian is the only other ocean cruise line we have sailed, and for a family cruise (Penny and I and our two boys) they were really enjoyable cruises, especially our Australia/New Zealand adventure. So it will be interesting!

It was officially announced this morning

http://dealbook.nytimes.com/2014/09/02/norwegian-cruise-to-buy-prestige-cruises-for-3-billion/

Well, filings and rumors had it that Apollo and PCH were getting ready to do an IPO for Regent or the whole PCH, so this may mean they couldn't see getting the price they wanted, OR as Apollo has a large holding in NCL, they decided that they would expand and strengthen that holding by adding premium and luxury cruise lines to it.

I agree with Ted; this definitely means change, but that change could well be for the better. The current management team at PCL has done a really good job with Oceania, but it's not so clear at Regent - mixed reviews. Apollo and the DelRio team at PCH are no dummies, and they've recently committed to build a new ship for Regent, so my guess, and that's all it is, a guess, is this announcement bodes well for Regent and its clientele.

Now watch and see if Royal Caribbean snaps up Crystal or more likely Silversea. Carnival already has Seabourn in the luxury cruise space. Luxury hotels make more money than middle of the road brands; I suspect that also applies to cruise lines, so adding some extra frosting on top makes good sense.

For us, HOPE SPRINGS ETERNAL!

Editing to Add (9/3/14): Anyone with any further interest in the NCL purchase of PCH should look at the current lead story "Norwegian's (CEO Kevin) Sheehan delves into the implications of acquiring Prestige Cruises" on SEATRADE Insider: at http://www.seatrade-insider.com. Another article there announces that Moody's rating service has confirmed NCL's less than investment grade rating of Ba3, but lowered its outlook on the company to 'negative' from 'stable' as a result of the purchase of PCH.