Shares in Heiton rose sharply on the Dublin market yesterday afternoon as some 5 per cent of the building materials group changed hands in one trade.

The trade came just before the market closed and was made at €5 per share - a premium compared to Heiton's trading pattern throughout the day. The identity of the buyer was not revealed, but market sources immediately suggested that it could be Heiton's rival, Grafton Group.

Grafton already owns 23.9 per cent of Heiton, having begun to build up a stake in 1999. If the firm was behind yesterday's purchase, its stake will have risen markedly close to the 29.9 per cent level that would force Grafton to make a bid for its smaller rival.

Heiton shares closed 6 per cent stronger at €5.00. At this price, the firm would be valued at €248 million. Grafton has a market capitalisation that is some five times higher.

The 2.5 million shares that were traded yesterday were worth some €12.5 million. The deal was handled by Goodbody Stockbrokers, which acts as broker to Grafton.

Neither Grafton nor Heiton was prepared to comment on the trade in Heiton's shares but further clarification is likely to come today when the buyer must, under stock exchange rules, declare their identity.

Grafton has consistently refused to comment on the motives behind its Heiton stake, even during a period in 2001 when the market was becoming increasingly sure that the firm was stake-building with the intention of making a bid for the group.

Since then the Grafton holding has been seen as a more of a defensive mechanism that would allow the larger firm to block any attempts from UK rivals to take over Heiton and enter the Irish market.

If Grafton was behind yesterday's deal, it is possible that it could be linked to smaller Irish builders providers player, Brooks Group, which has been put up for sale by its Finnish parent, UPM-Kymmene.

Shares in Grafton added seven cents to close at €5.97 yesterday.