By Marietta Cauchi
LONDON--U.K. military equipment maker Chemring Group PLC
(CHG.LN) Friday said it had received "a highly preliminary
expression of interest" from private equity firm Carlyle Group.
The statement follows a surge in Chemring's share price amid bid
speculation. Near the close, its shares were up 32% at 415 pence,
valuing the company at 810.7 million pounds ($1.28 billion).
Chemring has been mooted as a target after it posted a 50% drop
in pretax profit for the six months to April 30--which it blamed on
delays in U.S. and U.K. government contracts.
Experts have flagged up the possibility of industry
consolidation among the smaller aerospace and defense suppliers,
which would make it easier for the large original equipment makers
like Airbus and Boeing to secure supply chains.
Private equity have already moved into the sector: Better
Capital's portfolio company Gardner-Airia Holdings SAS recently
bought French maker of aerospace components Airia SAS, while LDC,
the buyout arm of Lloyds Banking Group (LYG) owns MB Aerospace.
-Write to Marietta Cauchi at marietta.cauchi@dowjones.com
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