CRH silent on City talk of largest ever takeover bid

CRH has refused to comment on a report that it is close to an agreement to acquire Tilcon Inc, a US concrete and stone company, located in Connecticut. A CRH spokesperson said it was the "company's policy not to comment on market rumours".

The CRH directors were in Salt Lake City, Utah, yesterday where one of its US operating subsidiaries is located. They were attending the company's monthly board meeting and the location is not thought to be connected with a US acquisition.

The company tries to hold some of its board meetings in different locations, where it has an operating presence. Earlier this year a board meeting was held in the Netherlands.

The acquisition report, in the London Evening Standard, said CRH had offered £180 million sterling, a price that beat off other potential buyers. That would represent its largest ever buy.

A spokesperson for British publicly quoted BTR group, Tilcon's parent, also refused to comment, saying that Tilcon was one of a series of its companies rumoured, over several months, to be on the sales list as the group seeks to rationalise its operations. It sold its British Tilcon company at the end of last year for £300 million sterling.

BTR said it would give an update on the rationalisation progress when it announces its results on September 12th.

In the past CRH has been linked to a number of potential acquisitions, which did not, however, lead to a deal. A company like Tilcon would fit in with CRH's operations in the US.

However, the suggested acquisition price appears far too high, as CRH, in July, purchased a larger company in the US for a much lower figure.

Tilcon, which has 150 outlets in the north east of the US, generates annual sales of $350 million. Allied Building Products, the third largest US distributor of roofing, exteriors for buildings and insulation products, had sales of $429 million in 1995 and it was purchased by CRH for $121 million (£75.6 million).

CRH's has traditionally sought value for money. The purchase of Allied is expected to add 1p to earnings per share in a full year. The consideration, which included debt - around half the total - was on an operating profit multiple of 8.4.

However, when CRH announced the acquisition, it stressed that the consideration reflected the impact of high seasonal working capital. It paid a premium on the net assets which throws up a goodwill of some £30 million.

CRH has spent £245 million on a series of acquisitions in Britain, the US and continental Europe so far this year. This is well ahead of the previous record of £159 million spent on acquisitions in 1994.