CRH is continuing to discuss doubling its stake in Israeli industrial firm, Mashav, despite failing to take up a formal option to raise its holding before it expired last week.

CRH had held an option to double its stake in Mashav since acquiring 25 per cent of the company in 2001 for $150 million (€117 million). The option, which was based on CRH paying a similar sum to raise its holding to 50 per cent, lapsed at the end of 2003.

An Israeli newspaper has reported, however, that a deal is close to being signed, with CRH said to have secured finance of $100 million from investment house, FIBI after renegotiating a price for Mashav.

Mashav's holdings include Israel's sole cement producer, Nesher. The company has faced trading difficulties in recent times due to persistent political unrest and its effect on the Israeli property market.

The details of the story could not be verified yesterday, but a spokesman for CRH confirmed that talks were continuing with Mashav's owner, Clal Industries and Investments.

He said CRH sees Mashav as "an excellent business" but added that there was no guarantee of the talks culminating in an agreement. It was reported last autumn that CRH was interested in raising its interests in Mashav, but only at a discounted price. That approach was reportedly rebuffed.

CRH is due to issue a trading update today, which should detail acquisitions undertaken in the second half of 2003, but is unlikely to clarify the position on Mashav.

Analysts are expecting the company to detail a solid improvement in the US - its major market - over the period, with a high level of acquisition activity also anticipated.

CRH's company broker, Davy, said yesterday that the firm may have spent as much as €1.6 billion on acquisitions in 2003.