When CRH announced the purchase of a stake in Catalan cement group Uniland at the end of last year, there was no sign of the corporate battle to come.

In Dublin, CRH shares added 1.7 per cent as the market welcomed the €300 million purchase of the 26 per cent stake and analysts hailed the company's return to the acquisition trail.

But the news that certain descendants of Uniland's two founding families had sold their interest to the Irish multinational was not well received in Barcelona. The remaining shareholders, numbering between 60 and 70, rallied to defend Uniland from what they saw as a hostile move.

In particular, they were outraged by what they saw as CRH's flouting of Uniland's bylaws, establishing the right of the company and its shareholders to first refusal on any stock being sold.

Describing CRH's purchase, which was carried out indirectly through holding companies, as "unlawful" and "fraudulent", they began legal action to force the building materials giant to relinquish its shares.

An extraordinary dividend of €1.37 million due in respect of CRH's shareholding was subsequently withheld and put on deposit pending the outcome of legal action.

CRH has insisted that it had legal title to the shares and had acted in good faith. It pledged to defend its position.

Sources close to the Irish company note that it was approached to purchase the shares last autumn. Because they were not directly held, but owned through investment vehicles, the pre-emption clause did not apply.

The case is expected to be heard in the Spanish courts in June, with judgment possible before the July summer recess.

CRH might have scored a minor legal victory in a preliminary hearing in Spain last week. The commercial court is understood to have refused to uphold the suspension of the company's rights in respect of its shares pending a full determination of the case, paving the way for release of the dividend.

There has been a further twist in recent weeks as the syndicate of controlling shareholders in Uniland changed tack. Abandoning their declared aim of protecting the company against CRH, they appointed US investment bank Lazard to explore the sale of their 74 per cent stake.

The private family-owned company, the result of the 1973 merger of two Catalan cement firms established more than 100 years ago, believes CRH's involvement has damaged its independence and affected its relationship with customers, some of whom are competitors of the Irish group.

CRH, Uniland and Lazard have all declined to comment, but it is understood that a sale process was formally launched last week. Up to 20 interested bidders, both trade buyers and private equity groups, have been invited to participate in a competitive auction with a view to wrapping up the sale before the summer.

CRH is not among the invited bidders. Sources say that an offer was made to the company in March to participate, but only on condition that it reverse its purchase of the 26 per cent shareholding. It is understood that the Irish company did not respond.

But CRH's significant shareholding could pose problems for any other purchaser.

Under Spanish tax law, a buyer must control 75 per cent of a company if it is to consolidate it for tax purposes, a move that could prove difficult given CRH's control of more than 26 per cent. Local sources have suggested that mechanisms could be found to surmount this obstacle, but this remains unclear.

Davy, broker to CRH, also notes that any potential buyer would have to take into account that CRH is Uniland's biggest customer in the Spanish market.

Questions have also been raised about just how cohesive the large bloc of controlling shareholders will prove to be. It is understood that they have signed a syndication pact with substantial penalties for any shareholder who breaks ranks.

There have, however, been suggestions that the pact may have been revised in recent weeks to accommodate certain wealthy shareholders reluctant to sell because of the capital gains tax liabilities.

An eventual deal is likely to come down to price. The CRH deal puts a value of around €1.14 billion on the company, but market sources believe that a buyer may have to pay in excess of €1.5 billion to acquire outright control.

Uniland, which had operating profits of €111 million on sales of €423 million in 2004, has interests in Tunisia, Argentina, Uruguay and the UK.

CRH, which has been operating in Spain for some 20 years, has left no doubt that it is interested in acquiring the company. Announcing results in early March, chief executive Liam O'Mahony noted: "We would like to buy 100 per cent, but are happy to have 26 per cent stake and be a strategic partner."

Close observers of the Irish company believe that it is unlikely to walk away. Ironically, given that pre-emption rights were the cause of the furore, CRH may be set to argue that, as a 26 per cent shareholder, it has the right of first refusal over any shares being sold.