GRAFTON'S share price suggests the Irish-based builders' merchant, which has dual listings in Dublin and London, is out of favour in the City.
But the latest slump is due to a rights issue that has seen 35 million new shares issued, raising £46 million to help fund the firm's growth.
Grafton has certainly been busy and has spent more than £200 million on acquisitions in the last five years, culminating in the latest deal with rival Jackson - the UK's seventh biggest chain of builders' merchants.
The £92.1 million acquisition of the privately owned firm from the East Midlands has consolidated Grafton's position as the UK's fourth biggest merchant.
Grafton's portion of the builders' merchant market in the UK now stands at 8 per cent. This is a substantial figure and the UK is now an important driver behind the firm's growth, providing 75 per cent of group revenue.
The Jackson deal was also a success as the firm's major UK rivals were all denied a chance to buy up customers from a major regional rival - but there is still another 92 per cent of the UK market to fight for, hence the rights issue.
Turning to the City has not deterred investors and Grafton is the only builders' merchant to warrant a 'buy' rating from Merrill Lynch despite suspicions that the Jackson deal may not enhance earnings per share until 2005.