In the continuing battle for Norwegian Cruise Line (NCL) the stakes have increased. First Carnival Corporation offered NOK 30 per share and said that was enough.

Carnival was subsequently outmaneuvered by Star Cruises, which raised the stakes to NOK 35 per share.

In the latest turn of events, Carnival is back in the game with a surprising offer of NOK 40 per share - if it gets control through majority ownership. But it was NCL that went back to Carnival after first rejecting its offer of NOK 30 as inadequate.

As this issue went to press, the question was if Star would raise its offer?

A showdown is expected February 4 in Oslo at the extraordinary shareholders' meeting called by Star, which has already announced a new board and a new CEO.

With some 250 million outstanding shares, the spread between NOK 30 and NOK 40 is approximately $1.25, boosting the valuation of NCL by some $312 million dollars - to an estimated $2.1 billion, including $800 million in debt.

One thing is certain at this point: shareholders and certain members of NCL's board and management will benefit handsomely from the increased evaluation.

After NCL discovered that Star had moved behind its back and acquired more than 50 percent of the outstanding shares, majority shareholders and management teamed up with a Norwegian financial firm, Kistefos, which bought shares, options and convertible loans, offering NOK 37.

The Norwegian firm beaded up by Norwegian investor Christian Sveaas quickly accumulated a significant shareholding of more than 35 percent, while diluting Star's holdings to 47 percent.

According to Norwegian sources, about 90 percent of NCL's shares are now held or controlled by only 20 shareholders, with 95 percent held by 65.

Meanwhile, Gerry Herrod, a major shareholder, pledged bis shares to Star, which would bring Star back up over 50 percent.

However, NCL management challenged Herrod and said the company had first rights to buy back some of Herrod's shares, which in turn may lower Star's holdings below 50 percent again.

Carnival's offer is contingent on NCL being able to deliver more than 50 percent ownership. If so, Star may be out, but will earn an extra 50 cents or so for each share it has already bought.

If it appears that NCL will get 50 percent or more, Star may up its offer to ensure that it gets majority ownership.

Or, Star may stay on with 47 percent and later acquire another 3.1 percent and thus wrestle control from Carnival.

There are also reports that the new Norwegian investors in NCL may not be satisfied with NOK 40 either and have set themselves higher goals.

So the see-saw battle continues inside and outside of courtrooms, stock exchanges and boardrooms. Among the many moves NCL is considering is the issuance of more shares, which, of course, will also dilute Star's holdings.

At press time, NCL traded for NOK 38.10 on the Oslo stock exchange and its ADRs traded for $19.00 on The New York Stock Exchange.

The bottom line is how badly does Star want entry into the U.S. market and how badly does Carnival want NCL, and to keep Star out? With Star in the market, Carnival (along with the other major companies) would face a strong and unpredictable competitor.

Star CEO Colin Au has said that his plans call for an aggressive newbuilding program for NCL, including a new megaship for the brand every year.

The smaller ships would eventually be transferred to the Far East for deployment there.