Macquarie Bank, the acquisitive Australian investment bank mulling a bid for the London Stock Exchange, has emerged as a late favourite to win the auction for Dyno Nobel, the Norwegian explosives company, according to a source close to the sale.

Second-round bids for Dyno Nobel are due by September 9. The company was put up for sale by private equity firm Industri Kapital in March and is expected to be sold for at least $1.5bn (€1.2bn).