VT Group is ready to pile on extra debt in order to pay out a special dividend to shareholders while continuing its pursuit of Mouchel.
The defence and support services firm may ask its bankers to extend its borrowing facilities by around 170m in order to fund a twin-track strategy.
VTs board meets this week to discuss a 233m, or 126pashare special payout to investors.
Defence strategy: VT Group, which built HMS Clyde, is attempting to dodge an attack by rival Babcock
The move is under consideration as chief executive Paul Lester attempts to dodge the clutches of rival Babcock, which has tabled a 680p-to-715p indicative offer, valuing VT at up to 1.3bn.
A VT spokesman said: ;The dividend is one of the options under consideration.
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VT may seek to extend an existing 305m loan facility in order to fund the dividend on top of the 330m cash needed for its Mouchel takeover.
But the board may alternatively abandon the Mouchel deal altogether, in order to focus its efforts on repelling suitor Babcock.
Shareholders are split on the merits of Babcocks approach, with some arguing it is overpaying for VT while others back the takeover proposal.
Over the weekend one top shareholder in VT, Tim Steer of Artemis, urged Lester to open the companys books to Babcock.
But VT has instead gone to the Takeover Panel asking it to force Babcock to table a formal bid next month.
VT meanwhile faces a March deadline to make a firm offer for Mouchel.
The position of defence titan BAE Systems in all this remains unclear. The firm is known to be interested in Babcocks submarine division.
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