£64m payout ends Caledonia feud

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The Independent Online

A long-running feud between members of the Cayzer shipping dynasty and Caledonia Investment Trust was resolved with a £64m handout to appease rebels.

A long-running feud between members of the Cayzer shipping dynasty and Caledonia Investment Trust was resolved with a £64m handout to appease rebels.

Sir James Cayzer, the veteran City banker, was at the head of a shareholder rebellion last year, which tried to break up Caledonia. The trust has holdings in other City stalwarts such as Close Brothers, ICAP and Rathbones.

The rebels claimed that the trust, home to the Cayzer family fortune since 1951, had been managed badly, had produced an erratic performance record and had its funds in high-risk investments. They wanted their capital out of the trust and their hostile attempts to do so even provoked intervention from the Takeover Panel.

Other members of the Cayzer family threw out the break-up plan last year, but the rows continued and, in a final effort at reconciliation, Caledonia said yesterday it would return capital to all its shareholders. This will allow the Cayzer dissidents to be bought out for £64m.

The Cayzer Trust Company (CTC), which makes up 38 per cent of Caledonia, has agreed to the financing plan and the funds will be used to buy out Sir James and his supporters, who hold 23 per cent of CTC. After the buyout, CTC will own about 32 per cent of Caledonia.

Tim Ingram, the chief executive of Caledonia, said: "We have been working for some months on a plan that is acceptable to all shareholders. Reaching an agreement on this is helpful as it enables us to go forward with our business model and with stability."

The special dividend will be priced at 82 per cent of the company's net asset value, and the plan will let shareholders claim a dividend on two shares in every nine they own. In February, Caledonia's net asset value was 1,272p per share but this is now closer to the trust's share price. Caledonia shares closed up 15p to 1,055p. Mr Ingram said the move should enhance the trust's net asset value. To pay for the handout, Caledonia has lined up a bank facility of £200m.

This would cover a payout to all shareholders if everyone decided to realise part of their investments, but Mr Ingram said this was highly unlikely.

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