Bottom Line: Strange Alliance

CAPITAL & Counties and Sun Alliance have finally kissed and made up. The details are hidden behind lawyers' confidentiality clauses, but the property company seems to have paid a full price for getting out of an over-optimistic contract, signed in the heat of a property bull market and repented at leisure.

An insignificant dispute and resolution, except that it brings to a close a heavy- handed bit of posturing by TransAtlantic, C&C's parent, and arguably puts a small chunk of Sun Alliance up for sale.

Despite Donald Gordon's cage-rattling it always looked unlikely that TransAtlantic's purchase of 1.5 million Sun Alliance shares presaged anything more than a minor corporate face-off.

Sun Alliance was right to be puzzled by Mr Gordon's claim that the shares were 'a strategic stake in embryo'. His investment, worth a modest pounds 5m, was a mere drop in the ocean of the insurer's pounds 3bn market value and was only taken to publicise his claims.

Yesterday's news could signal the sell-off of TransAtlantic's 3 per cent stake in Sun Alliance, but as most of it is held through its 50 per cent-owned Sun Life subsidiary, even that seems improbable.

The strength of Sun Alliance's shares since last September - up 7 per cent - has spared Mr Gordon blushes. But shareholders might question whether boardroom arm-twisting is a sensible use for their funds.