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Friday 05 September, 2003

Caledonia & Cayzer

Restructuring Prpsls-Pt1-Rplt

Caledonia Realisation & Cayzer Cont
5 September 2003

The 'Restructuring Proposals - Pt.1' announcement for Caledonia Realisation &
Cayzer Cont released today at 07:00 under RNS No 4313P has been re-released to
facilitate onward transmission by third party vendors.

The announcement is unchanged and is reproduced in full below.




Embargoed until 7:00am                                        5 September 2003


   Not for release, publication or distribution in or into the United States,
                           Canada, Australia or Japan

                       Proposals for the restructuring of

Caledonia Investments plc ('Caledonia') and The Cayzer Trust Company Limited ('
                                     CTC')

Set out in this announcement are details of the proposals (the 'Proposals') for
the restructuring of Caledonia and CTC (the 'Caledonia Group') which the boards
of Cayzer Continuation Limited ('CC') and Caledonia Realisation Limited ('CR')
believe to be in the best interests of shareholders of both Caledonia and CTC.
The Proposals have the support of certain shareholders of Caledonia who together
hold 19.7% of the issued ordinary share capital, representing approximately
37.6% of the Free Float, including the two largest institutional shareholders,
Hermes and Schroders.  These shareholders believe that to continue the status
quo of the Caledonia Group is not an option and accordingly support the
Proposals in the absence of suitable alternative proposals from the board of
Caledonia.  For these purposes, Free Float means the total number of issued
ordinary shares in Caledonia not owned by CTC or members of the Cayzer family
and related entities (other than the Cayzer-Rotherwick Group, as defined under '
Shareholder support' below).

The boards of CC and CR had hoped to engage in a constructive dialogue with the
boards of Caledonia and CTC, but on 7 July 2003, the board of Caledonia publicly
rejected the Proposals whilst at the same time the board of CTC wrote to
shareholders indicating that it too had rejected the Proposals.  The boards of
CC and CR believe it is important to ensure that the shareholders of both
Caledonia and CTC are made aware of the details of the Proposals and the
benefits they believe these would bring, so that the ultimate beneficial owners
of the relevant companies may have an opportunity to consider the Proposals
themselves.

Highlights

•         The Proposals put to the boards of Caledonia and CTC would, if
          implemented, provide Caledonia and CTC shareholders with choice, 
          flexibility and the opportunity for diversification of investments and  
          risk.
•         The Proposals would result in the realisation of Caledonia's assets
          over a period of time.
•         In due course, shareholders in both Caledonia and CTC could either:
                 -   exit for cash in the medium term at a value which would 
                     reflect, to the fullest extent possible, the underlying net 
                     asset value ('NAV') of Caledonia; or
                 -   retain their realisation proceeds without incurring tax in 
                     a vehicle allowing shareholders to tailor their investment 
                     policy to their individual needs.
•         The principal objectives of the Proposals are to:
                 -   realise to the fullest extent possible the underlying NAV 
                     of Caledonia and eliminate the discount reflected in its 
                     share price;
                 -   deliver maximum cash proceeds to shareholders;
                 -   provide the opportunity to reinvest the realisation 
                     proceeds in a new investment company providing a better 
                     spread of investments to reduce the concentration of risk;
                 -   offer maximum value and flexibility for all shareholders of 
                     CTC and Caledonia;
                 -   give each reinvesting shareholder a direct say in the 
                     investment of his or her own assets; and
                 -   provide a corporate governance structure that is likely to 
                     comply with new mandatory rules for investment trust 
                     governance.
•         In addition, CTC shareholders would benefit further from:
                -    the preservation of the Cayzer family business, with an 
                     updated structure,  which can meet the needs of the current 
                     family and future generations;
                -    increased liquidity; and
                -    elimination of the charge to tax that would otherwise be 
                     incurred on disposal by CTC of its holding in Caledonia and 
                     which effectively represents a further discount suffered by 
                     CTC shareholders on disposal of their shares in CTC.

The Proposals outlined in this announcement require the support of the boards of
Caledonia and CTC in order to be implemented in their current form.  The boards
of CC and CR stand ready to discuss the Proposals with the boards of Caledonia
and CTC with a view to the Proposals being put to shareholders, and believe that
these discussions are in the best interests of shareholders of both Caledonia
and CTC.  The directors of CC and CR believe that the boards of Caledonia and
CTC have a duty to their shareholders to re-engage with them.

Sir John Craven, Chairman of CC and CR, commenting on the Proposals, said:

'The proposed restructuring represents, in our view, the best opportunity for
shareholders in both Caledonia and CTC to maximise value.  For the first time,
shareholders would have the choice and flexibility to realise full value from
their investment or continue with a new modern investment vehicle.  Tax is not a
barrier to completing the proposals.'

'The full benefits of the proposals would accrue to existing shareholders in
direct proportion to their respective existing interests in Caledonia and CTC.
Shareholders who elect to receive shares in Caledonia Realisation would receive
cash proceeds which we believe would reflect more closely the underlying net
asset value of their existing investment.  Shareholders who elect to receive
shares in Cayzer Continuation and continue with this investment company would
gain all the advantages obtained by pooling assets in a large economic unit
while retaining the choice and flexibility open to individual investors.'

'These proposals are supported by institutional and other shareholders
representing 19.7% of the issued share capital of Caledonia and 37.6% of the
free float.  By underlying value, the proposals are supported by 29.1% of the
shareholders of Caledonia and CTC.  The status quo is not an option.  The board
of Caledonia should re-engage with us to enable these proposals to be put to
shareholders for their consideration.'

Enquiries

Sir John Craven                   Caledonia Realisation Limited    020 7409 5649
                                  Cayzer Continuation Limited

Anthony Cardew                    CardewChancery                   020 7930 0777

Phil Brown, Corporate Advisory    Deutsche Bank                    020 7545 8000
James Agnew, Corporate Broking
Nigel Szembel, Press Office

Deutsche Bank AG London ('Deutsche Bank'), which is regulated by the Financial
Services Authority for the conduct of designated investment business in the UK,
is acting for CC and CR and no one else in connection with the Proposals and
will not be responsible to anyone other than CC and CR for providing the
protections afforded to clients of Deutsche Bank nor for providing advice in
connection with the Proposals or any other transaction or arrangement referred
to herein.

Deloitte & Touche LLP is acting for CC and CR and no one else in connection with
the Proposals and will not be responsible to anyone other than CC and CR for
providing advice in connection with the Proposals or any other transaction or
arrangement referred to herein.

Mercer Investment Consulting ('Mercer'), a division of Mercer Human Resource
Consulting Limited, is acting for CC and CR and no one else in connection with
the Proposals and will not be liable to anyone other than CC and CR for
providing the protections afforded to clients of Mercer, nor be responsible for
providing advice in connection with the Proposals or any other transaction or
arrangement referred to herein.

This announcement does not constitute a firm intention to make an offer under
The City Code on Takeovers And Mergers ('The City Code') or an invitation to
purchase any securities.



                      This information is provided by RNS
            The company news service from the London Stock Exchange