National Express has once again been given more time to place a firm offer to take over Stagecoach.
The two companies confirmed they were in talks over a deal in September.
The deal would value Stagecoach at £445 million.
National Express was originally given until October 19 to make a firm offer or walk away, under City Takeover Panel rules.
The company was given a new deadline of 5pm on November 16.
The deadline has now been extended to December 14 for National Express to either announce a firm intention to make an offer or announce that it does not intend to make an offer.
Under the terms of the possible all-share tie-up, National Express would own around 75% of the combined group and Stagecoach shareholders around 25%.
In a statement, the companies said: “Reciprocal due diligence is now at an advanced stage and constructive discussions between Stagecoach and National Express are ongoing.
“The Boards of Stagecoach and National Express continue to believe that the potential combination would be a strategically compelling proposition delivering strong value creation for both sets of shareholders.”
Stagecoach was founded in Perth in 1980 by Sir Brian Souter and his sister, Dame Ann Gloag.