Grafton executive chairman Mr Michael Chadwick has raised €14.7 million through the sale of 2.8 million shares in the building materials group.

The transaction marks Mr Chadwick's first disposal of Grafton stock.

He retains a holding of 22 million shares, or 10 per cent of the company. At last night's closing price, this stake was worth almost €120 million.

Mr Chadwick bought most of the shares in 1987, when they were worth around 50p (63 cents). At these prices, the stake he sold yesterday would have been worth less than €2 million.

Mr Chadwick was joined in the share placing by Grafton finance director Mr Colm Ó Nualláin, who raised €1.06 million by selling 200,000 shares.

Non-executive director Mr Anthony Collins of solicitors Eugene F Collins raised €577,000 through the sale of 30,000 shares.

The placing was made at €5.30, with UK and US institutions the main buyers. A number of new investors are thought to have become involved in Grafton as a result of the move, which was handled by Goodbody Stockbrokers.

A spokesman for Grafton said he was unaware of a particular reason for the placing of the three million shares.

He pointed out that all three directors involved still had more shares than they had a year ago, since they had each participated in a share issue at the start of 2003.

Mr Chadwick spent almost €8 million acquiring shares in the rights issue in March. The move was viewed at the time as an important vote of confidence in the company, which has seen its share price grow by more than half since the start of the year.

The share issue was used to part-fund Grafton's ambitious €144 million purchase of UK builders suppliers Jackson. The acquisition, which was completed in March, contributed almost €5 million to Grafton's operating profit of €53.4 million over the first six months of the year.

Mr Chadwick, who is widely credited with Grafton's successful development over recent times, has waived part of his annual salary for the past three years. In 2002, he was due a total package of €514,00 but drew down just €177,000 of this.

Mr Chadwick has, however, benefited substantially from share redemptions at the firm.

Shares in Grafton closed at €5.40 last night, up seven cents on the day.