Sales in the Irish divisions of Heiton Group, the builders' merchant that is the subject of a €336 million bid from competitor Grafton, were strong during the first three months of its financial year, the company said yesterday. Barry O'Halloran reports.
In a statement issued at its annual general meeting (agm) yesterday, chairman, Mr Richard Keatinge, said the company was trading in buoyant construction and retail markets, and the board was pleased with its performance in the current year.
"Sales in both our Irish divisions are well up in the first three months, compared with the same period last year and, in the UK, sales levels are broadly in line with last year," he said.
He added that the purchase of Eddie's Hardware in Drogheda, Co Louth, was completed in June, and said it would contribute to earnings this year.
Earlier this month, its bigger competitor and shareholder, Grafton, ended weeks of negotiations by making a formal offer for the company valuing it at €6.54 a share, or €336 million.
The price is a premium of 39 per cent on Heiton's closing price of €4.70 in May, before Grafton began building a stake in the company. Heiton's directors have said they will be recommending the offer to shareholders.
Grafton will send shareholders a formal offer in September, the meeting heard yesterday. To succeed, Grafton has to get the support of stakeholders with at least 80 per cent of the company's value. The Competition Authority will also be scrutinising the deal, as both operate in the DIY and builders' merchants markets. Heiton is best known by its Atlantic Homecare and Heiton Buckley stores. Grafton's highest-profile business is Woodie's DIY.
The meeting heard yesterday that assuming the offer is accepted, and allowing the Competition Authority time to complete its review, shareholders would be likely to receive payment for their stake next January.
Heiton chief executive, Mr Leo Martin, also confirmed that he would be taking an executive role on the board of the newly enlarged Grafton Group if the deal succeeds. However, he said he was not in a position to say what that role would be.
Speaking at the meeting, Mr Keatinge said that if the offer succeeded, it would be the last agm. Heiton began life in 1818, became an incorporated company in 1896 and floated on the Irish Stock Exchange in 1965, when it raised £240,000 (€304,737) from investors.
