Grafton takeover deal gets go-ahead

SHARES in Grafton surged 8% yesterday after the building materials and DIY group finally got the go-ahead for its takeover of smaller rival Heiton.

The markets reacted favourably to the news that the State competition watchdog had backed the deal, attaching just two conditions. Grafton said yesterday it had secured the support of 92% of Heiton shareholders and that the takeover would proceed as planned. It urged remaining Heiton shareholders that had not yet accepted its offer to do so “without delay”.

Grafton chairman Michael Chadwick said the deal would create an Irish group that would be big enough to compete against major international operators, both here and abroad. “Heiton Group is an excellent strategic fit with Grafton’s Irish and British operations,” said Mr Chadwick, who owns nearly 10% of Grafton.

Heiton chief executive Leo Martin has joined the board of the enlarged group, which will retain the separate identities of the existing Grafton and Heiton operations.

Heiton shares also rose yesterday, adding 10% to €7.80. Shares in the company, however, are viewed in the market as a proxy for investing in Grafton, because the takeover will see Heiton shareholders receive €2.64 in cash and a little over half of one Grafton share, in return for every Heiton share they hold.

Yesterday’s movements came after the Competition Authority removed the last obstacle to the deal.