In the end Royal Caribbean International (RCI) prevailed with a $515 million bid to acquire Celebrity Cruises, which rejected a $525 million bid from Carnival Corporation. RCI will pay $245 million in cash and the balance in RCI stock and assumes Celebrity’s $800 million of debt.

$515 million vs. $525 million

It remains a puzzle, however, why Celebrity accepted the lower bid. The official answer from RCI was that there was “better chemistry between RCI and Celebrity.”

According to sources, however, RCI’s was a firm bid with near completion of the due diligence process.

Carnival’s bid meanwhile was also dependent on completion of due diligence, although it also held out the possibility of raising its bid further. But Celebrity’s owners, who barely acknowledged Carnival’s offer, were said to have recalled Carnival’s bid to take over Premier Cruise Lines, which was withdrawn after due diligence. If that were to happen, Celebrity could have found itself at the mercy of one bidder.

It has also been speculated that the agreement between RCI and Celebrity allowed RCI to match other offers and that there was a break-out fee, which a source close to the deal denied.

In the end, maybe it was no great mystery. Celebrity, which was forced to sell by one of its owners, the Overseas Shipholding Group (OSG), said to be unhappy with the line’s financial performance, may have felt better about the one bird in hand than two on the bush.

Thus, what promised to become a battle, never was.

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RCI has repeated its statements that it intends to operate Celebrity as a separate brand.

Meanwhile, there is plenty of industry speculation, but due to the short time span of events, understandably little substantive comments offered by respective cruise lines.