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Carlyle Chemring bid under threat following profit warning

29 Aug 2012

Buyout giant Carlyle’s embryonic bid for military equipment maker Chemring is already under threat after the company issued a profit warning.

Shares in the UK defence group had slumped by up to16 per cent on Tuesday after the defence group announced its full-year operating profit would be £15m lower than expected.

Yesterday’s close price of £3.26 a share was down more than a fifth compared to the £4.14 the stock hit after Carlyle announced its interest.

The company, which is based in Fareham, England and makes countermeasures for protecting air, sea and land-based platforms from threats, has a current market value of about £640m.

Carlyle made a “highly preliminary expression of interest” earlier this month, and has until 14 September to either make a firm bid for the business or withdraw.

Defence companies have become prime takeover targets in recent years as governments around the world rein in spending on defence budgets.

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