Cayzer feud heads into calmer waters

HOPES are rising for a peace deal in the Cayzer shipping dynasty's feud, which could prove profitable for shareholders in its £900m quoted vehicle, Caledonia Investments.

A source says rebels were pleased with yesterday's talks at a closed meeting of the Cayzer Trust, which holds 26% of Caledonia.

'The meeting was constructive. They are very pleased with the way it went.'

After the last meeting in July, the two factions stormed off angrily before issuing conflicting press releases.

Acrimony boiled over again two weeks ago when rebel Nigel Cayzer was booted off the Caledonia board.

Caledonia shares, unchanged at 860p, stand at a 28% discount to their estimated net assets of £12.

Its interests range from stakes in merchant bank Close Brothers and money broker ICAP to an island resort in the Bahamas.

The shares are depressed by the Cayzer Trust's huge stake. Family member Peter Buckley chairs both the trust and Caledonia-Rebel family members, with the support of colourful patriarch Sir James Cayzer, have campaigned for the trust to be broken up. They suffer from a second discount, with trust shares trading at barely a third of the underlying Caledonia assets.

In a concession to the rebels, Buckley has proposed 'streamlining the share capital and ... a possible limited share redemption proposal'.

One idea is simply to give each trust shareholder his or her underlying Caledonia shares.

Buckley also brought in two outside nonexecutives and agreed to split his chairman and chief executive roles at Caledonia.