Heiton finally hammers out deal

THE long-awaited deal to match up Ireland’s leading builders merchants and DIY chains was finally hammered out last night, when Heiton’s board recommended the terms of a takeover offer from Grafton to its shareholders.

The takeover values Heiton, whose stores include Heiton Buckley, Atlantic Homecare and Cork Builders Providers, at €336 million or €6.54 per share. Heiton shares closed yesterday at €6.25.

Grafton, which owns Woodie’s DIY and the Chadwicks chain, will offer a mixture of cash and Grafton shares.

Shareholders will be offered a “mix and match” facility that will allow them to accept additional Grafton shares instead of the €2.64 cash element of the offer.

Grafton’s offer is almost 26% higher than Heiton’s price at close of business on June 16, the day before news emerged takeover talks between the companies had broken down over price.

Grafton originally proposed €5.85 before raising its price to €6.00 and then to €6.35, offers that were dismissed as “paltry” by Heiton chief executive Leo Martin.

News of the approach resulted in Heiton’s share price rocketing to €6.70, before staging a retreat as investors became less certain that the takeover would proceed. Some analysts had expected a deal would be agreed for between €7.00 and €7.50.

The price offered last night valued Heiton at 12.3 times earnings.

The offer document, which will be released to shareholders today, revealed talks between the parties restarted on July 27.

Grafton needs 80% of shareholders to accept the proposal. Heiton’s directors, who control 2.4% of the company between them, have given undertakings to accept the offer.

Grafton said it would safeguard the existing rights of Heiton employees.