Mr Michael Chadwick, executive chairman of Grafton Group, has spent nearly €8 million acquiring shares in the company as part of its recent rights issue, writes Jane O'Sullivan

The move, which analysts described as a vote of confidence in the company, raises his stake in Grafton from 10.16 per cent to 10.28 per cent.

Mr Chadwick took up his full entitlement of shares under the one-for-five rights issue, undertaken to help fund the acquisition of Jacksons Building Centres, Britain's largest regional builders suppliers.

This saw him acquire 3,580,402 shares at a price of €2 each yesterday, a discount of 36.5 per cent to last night's closing price of €3.15.

However, Mr Chadwick has also taken up rights over a further 281,312 shares after purchasing the rights from a family trust at a price of 85 cents per share. He then paid a further €2 to take up the rights, bringing his total spending to €7.96 million.

His take-up was well above the levels previously signalled. As part of the rights issue documentation, he had committed to taking up rights to a minimum value of €1 million or 500,000 shares.

"It's a massive vote of confidence in the company," said Mr Florence O'Donoghue, analyst with Davy Stockbrokers.

Meanwhile, the family trust, of which Mr Chadwick is also a trustee, has taken up rights over 280,000 shares, leaving it with a 1.46 per cent stake in the company.

Grafton also said that two non-executive directors, Mr Anthony Collins and Mr Richard Jewson, had also taken up their rights in full this week. Last week, the company said its other directors had taken up their full entitlement of shares under the rights issue which will raise €70.6 million.

These included managing director Mr Norman Kilroy, finance director Mr Colm O'Nuallain, executive director Mr Fergus Malone, and non-executive director Ms Gillian Bowler.