Carlyle has until Friday to present a bid for defence group Chemring, but the company is expected to extend the deadline.
The company is likely to allow another 28 days, the limit under UK Takeover Panel rules, to come to an agreement with Carlyle. The timing is not great for the defence group. The London-listed business has seen its share price drop after operating profits came in £15m lower than anticipated. Chemring blamed this on an IT system fault at a Florida subsidiary and delays to a significant product launch.
Defence companies are coping with budget cuts in US and European military spending as governments tighten their belts and forces retreat from conflicts in Iraq and Afghanistan.
This month merger talks between European defence giants BAE Systems and EADS collapsed after a lack of political support for the deal and uncertainty about the future of both companies.