Grafton, the Woodie's DIY group, has increased its stake in British Dredging, a publicly quoted builders' merchant company, from 24.94 per cent to 29.97 per cent. This brings it perilously close to the 30 per cent level which would force it to make a bid for the whole company.
However, Grafton's executive chairman, Mr Michael Chadwick, has insisted that he has no "immediate plans" to increase the stake and "no present plans" to mount a takeover. It is a "strategic investment", he told The Irish Times.
The latest stake of 882,000 ordinary shares, or 5.03 per cent of the company, cost £1.28 million sterling, or 145p per share, the same price as the initial stake. It is not showing any gain, so far, on the investment, which has cost £7.6 million. Grafton acquired a 24.93 per cent stake in the British company last May. It was purchased from Redbird Holdings. Grafton has no board representation. "Nor have we sought representation," said Mr Chadwick. "In some ways we are in competition." Last May, Grafton said the investment gave it a stake in a "UK builders' merchants that is closely aligned to Grafton".
British Dredging employs 515 people from a network of outlets in the West Midlands and Wales. It has 1,850 shareholders and Grafton is the largest among them. Headquartered in Cardiff, it manufactures and supplies concrete paving blocks and is also involved in ship repairing, marine dredging and the supply of sand and gravel. It has a joint 50/50 dredging company with RMC.
