Chemring Requests Second Extension as Carlyle Bid Talks Continue

Carlyle Group LP has been granted another month to consider making a bid for Chemring Plc, implying talks with the maker of munitions and aircraft protection-equipment are progressing.

A Nov. 9 so-called “put up or shut up” deadline has been put in place by the U.K.’s takeover panel, Fareham, England-based Chemring said today in a statement. It is the second time the parties have requested an extension.

Chemring on Aug. 17 said it received a preliminary approach from Carlyle, boosting its share price as high as 414.70 pence to value the company 801 million pounds ($1.3 billion). A cut to this year’s profit target on Aug. 28 and concern that a bid may not materialize has caused Chemring to retreat to levels just above their trading range before the private equity firm’s interest surfaced.

Chemring has fallen 16.2 percent this year, valuing the company at 648 million pounds ($1 billion). The stock closed yesterday at 335.30 pence in London, about 7 percent higher than before Chemring announced the approach by Carlyle.

The negotiations are taking place against a backdrop of declining defense spending in the U.S., Chemring’s largest market, and Europe. Carlyle’s existing investments include aerospace software company Arinc and Vought Aircraft Industries.

Carlyle had until today to declare a bid or ask Chemring to seek the extension.

“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,” the company said, adding that a further extension of the deadline is possible.

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