The UK takeover panel has granted the Carlyle Group extra time in its approach for British military supplier Chemring, postponing the “put up or shut up” deadline by a month.
Under the UK takeover code, Carlyle had until 14 September to either make a firm intention to buy the ailing business or walk away.
That deadline has now been pushed back to the end of 12 October at Chemring's request.
“There is no certainty that, at the end of this period, an offer for Chemring will be made, nor as to the terms of any such offer (if made),” Chemring said in a statement.
The British defence business, whose shares have suffered as profits have fallen, was up more than five per cent to 344p this morning, giving it a market cap of £665m.
In the first half of the year profits went from £49.7m to £31.6m, a drop spurred since the US began withdrawing its efforts in Iraq and Afghanistan.
The Pentagon now intends to cut its spend by 2.5 per cent to $530bn (€429bn) in 2013 as the US attempts to tame its public debt burden.
British think-tank the Centre for European Reform predicts that most medium-sized European states will cut their annual defence budgets by ten to 15 per cent, forcing businesses to consolidate and creating an opportunity for private equity.