Wires

UPDATE 1-Chemring, Carlyle get more time to agree on deal

Share

(Adds background)

Oct 12 (Reuters) - Chemring Group Plc said U.S.private equity company Carlyle Group has been grantedanother extension to the "put up or shut up" deadline to hammerout an offer for the defence equipment maker.

The UK takeover panel has extended until Nov. 9 the deadlinefor Carlyle to table a firm bid for Chemring or walk away. Thedeadline was to expire on Friday.

Chemring, which makes flares, equipment to detect improvisedexplosive devices and mechanisms used in ejection seats, said onAug. 17 that it had received a highly preliminary expression ofinterest from Carlyle.

Carlyle asked last month for an extension to the deadline tomake a firm bid for Chemring.

Defence companies are coping with budget cuts in the UnitedStates and Europe as governments tighten their belts in aneffort to rein in deficits.

With the collapse of merger talks between defence industrygiants BAE Systems Plc and Airbus parent company EADS, the focus is likely to shift to smaller deals.

Chemring shares closed at 335.3 pence on Thursday on theLondon Stock Exchange. The shares, which spiked on Aug. 17 oninvestor enthusiasm over a deal, gave up most of those gainsafter a profit warning from the company raised fears thatCarlyle might walk away.

(Reporting by Abhishek Takle in Bangalore; Editing by DonSebastian)

((abhishek.takle@thomsonreuters.com)(within UK +44 20 75421810)(outside UK +91 80 4135 6102)(Reuters Messaging:abhishek.takle.thomsonreuters.com@reuters.net))

Keywords: CHEMRING CARLYLE/