Mr Michael Chadwick has said that he has not sought representation on the board of British Dredging. Mr Chadwick's Grafton Group has built up a 29.97 per cent stake in the Welsh company a fraction below the level at which the Irish building materials group would be forced to make a compulsory bid.

The Grafton chief executive has used the traditional stock market jargon "no immediate plans for a bid" and "strategic investment" to hide what most in the market believe is his real intention a bid for the British company.

This would be pitched at a sufficient premium to the current market price to persuade the major shareholders such as M&G, Mercury Asset Management, RMC and Martin Currie to sell their shares.

The Welsh company apart from dredging and ship repair has complementary businesses to Grafton in paving slabs and sand and gravel.

The price paid by Grafton 145p a share values British Dredging at a pretty rich £25 million. But selling off the nonbuilding materials business could reduce the overall cost of a full-scale bid.

Finding anybody in the market who really believes that Grafton has spent £7.6 million for a "strategic investment" in British Dredging is well nigh impossible. The only question is whether Mr Chadwick enlists the support of the British Dredging board for a friendly bid or simply goes ahead and bids anyway.