Caledonia Investments chairman threatens to sue rebel shareholders

The chairman and chief executive of Caledonia Investments, Peter Buckley, is considering suing three rebel shareholders for distributing a letter criticising his management of the investment group's share portfolio.

A group of shareholders in the Cayzer Trust Company, the family trust that has the major shareholding in Caledonia, wants to convert their CTC shares into proper Caledonia shares, potentially making it easier to liquidate their holdings. They are also disgruntled at the discount beneath which Caledonia shares trade on the stock market relative to their underlying net asset value (NAV).

In a letter to fellow CTC shareholders, Lord Rotherwick, Nigel Cayzer and Ian Molson attack Caledonia's "eclectic mix of primarily minority investments", which they claim is difficult and costly to manage. It blames "management shortcomings" for the shares' hefty discount to NAV.

A friend of Mr Buckley said he was speaking to lawyers about what action to take over the document. "This is a very disingenuous letter," the friend said.

A spokesman for the so-called Rotherwick group, which has the backing of City grandee Sir James Cayzer, said: "The investment portfolio is not seen to have moved with the times."

The company, which is valued at £644m, faces a protest from the rebels at its annual meeting tomorrow. They are being advised by Sir John Craven at the privately-owned investment bank Gleacher.

A previous attempt to restructure the company at an extraordinary meeting in June failed, and last month Nigel Cayzer, a leading critic, was ousted from the board.

Caledonia declined to comment. Its shares closed up 35.5p, or 4.3 per cent, at 870p.