Caledonia confident of seeing off Cayzer break-up plan

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The Independent Online

Peter Buckley, chairman and chief executive of Caledonia Investments, had never seen so much interest in the annual results of this obscure FTSE 250 company. But thanks to a row inside the family trust that controls Caledonia, yesterday's statement put Mr Buckley firmly in the City spotlight.

Martin Cross, an analyst at Teather & Greenwood, covering the company, said: "I've had more calls from journalists on Caledonia today than I have had in my entire life."

Mr Buckley said the results made him confident of seeing off the attempt to liquidate Caledonia's investment portfolio that has been launched by Sir James Cayzer, his cousin and fellow shareholder in the Cayzer family trust. The trust, which has a 34 per cent stake in Caledonia, meets at an extraordinary meeting on Friday.

"I believe that Caledonia's long-term strategy will be endorsed," said Mr Buckley. "We have a spread of interests and people spend a lot of time telling us we should be more focused. I don't agree with that."

Inquiries yesterday about the family row were "disallowed", he added. The dispute has already led to revelations of sharedealings in the family trust in breach of its rules, and public questioning of the merits of Caledonia's investment strategy. "I find it very regrettable that this has found its way into the newspapers," Mr Buckley said. "The criticism has been unwarranted and wrong, which is not to say that we get everything right."

Caledonia yesterday posted a 13 per cent increase in net asset value per share in the 12 months to 31 March, against a 1 per cent decline in the stock market over the same period. Caledonia's investments include the Sloane Club in London, as well as stakes in Close Brothers and Friends Ivory & Sime, the investment banks. It also made £25.8m after Chase Manhattan, the US bank, acquired its stake in Robert Fleming.

Caledonia said the discount of its share price to underlying asset value "in the view of the company remains too high". It said if a contingent capital gains tax liability was taken into account the discount had narrowed to 30 per cent by 31 March, and had since then fallen to 21 per cent. Mr Buckley said it would be "very challenging" to get as low as 10 per cent "but I hope we might be able to keep it down from the 30 per cent level that it has been at in more recent times",

Sir James wants to liquidate his stake in the family trust at close to the value of the underlying net assets in Caledonia, a plan that would in effect force Caledonia to be broken up. He is thought to have the support of shareholders behind 25 per cent of the trust, but would need a majority for his motion to succeed.

Mr Buckley said he could envisage a compromise solution that ought to meet his cousin's demands, "but I don't think it would be accepted". He added: "I would be hoping to be laying the matter to rest [on Friday]."

Mr Cross said: "Buckley didn't want to talk about it today, but he sounds confident."