Merger payoff costs P&O £40m

P&O Princess Cruises will have to pay out €58.8m (£40m) to a departing director when it completes its deal to merge with Carnival Corporation, its US rival.

The cash is a deferred payment from P&O's 2000 takeover of Aida Cruises from Deutsche Seereederei, a German shipping company entirely owned by Horst Rahe, a non-executive director of the UK shipping giant P&O. Although the company had nearly three years to pay up, the takeover will trigger a clause in the deal to cough up early.

"Deutsche has confirmed to P&O Princess that it will exercise this right," stated a circular to shareholders last week. "Accordingly, P&O will pay €58.8m to Deutsche shortly after completion."

Mr Rahe was appointed to the board in May 2001. He founded Aida Cruises in 1996, and got P&O in as a joint venture partner in 1999.

He also owns 1.6 per cent of P&O. He is expected to net around £50m from the sale of these shares.

Deutsche is the privatised former East German shipping business. The extraordinary general meeting to approve the P&O merger with Carnival will take place on 16 April.