Caledonia Investments is convening a meeting to ask shareholders to approve a ‘Rule 9 waiver’ – this is part of the Takeover Code.

Currently, a ‘concert party’ of shareholders connected to the Cayzer family controls 49.49% of the trust’s shares and voting rights. Ordinarily, at its AGM it would ask shareholders to approve a Rule 9 waiver which allows the concert party to increase the percentage that it owns without being forced to make a takeover bid (the Takeover Code says that if you own between 30% and 50% of a company and increase your percentage holding, you are forced to bid for it). The only issue with doing this at the AGM is that the maximum percentage that you can end up owning this way is 49.9%.

This new vote, which will be held on 18 December at 2pm at Caledonia’s offices, would allow the concert party to hold more than 50% without triggering a bid. Clearly the concert party is conflicted on this, and so it will not vote its shares.

At the meeting, Caledonia will also ask shareholders to approve buybacks of up to 5% of its current shares in issue.

[This seems eminently sensible to me. At today’s results meeting, the company made it clear that buybacks will be used “judiciously”, and at the same time, Caledonia will continue to invest in its portfolio.]

Also today, Caledonia has announced interim results. The NAV total return for the period is 0.5%; held back by adverse currency moves, which took off 3.6%, and a write down in the value of Cooke Optics, where the statement says that the reduced valuation reflects continued uncertainty over the recovery of demand following the 2023 Hollywood actors and writers’ strikes.

The currency move is mostly down to the weakness of the US dollar against the pound over the six months ended 30 September 2024. In the wake of Trump’s election, the dollar has rebounded and so this currency move should have reversed.

CLDN : Caledonia seeks to clear the way for more buybacks