Grafton, the builders' providers and Woodies DIY group, is negotiating with US institutions to raise $55 million (£39 million) in a private placing of loan notes. This information is contained in a note in Grafton's document proposing the acquisition of British Dredging. The funds, the document says, are for the group's financing purposes. Grafton has also received a loan facility from the Bank of Ireland for £34 million, until November 30th 1999, to fund the acquisition. It is understood that the funds from the loan notes will be used to pay off the Bank of Ireland loan.

Grafton already has a 29.9 per cent of British Dredging, a publicly quoted builders merchants. It has offered 193.6p sterling cash per share for the outstanding shares it does not already own. The extra holding would cost Grafton £25.1 million (£30 million). The deal is being recommended by the British Dredging board which has less than 1 per cent of the shares.