The company operating Australia's Nauru and Manus Island detention centres has had its contract extended but is no longer the sole preferred bidder for the next five-year deal.
Broadspectrum, the company formerly known as Transfield, said the Department of Immigration and Border Protection extended the contract by 12 months to give it time to increase the scope of the tender for the next five-year deal.
The company, which has operated the centres since September 2012, had been the government's sole preferred bidder for that contract but said on Monday that is no longer the case.
Broadspectrum understands that it and one other firm will receive a request to submit an amended tender.
"We understand the department's position, and appreciate it needs additional time to formally review and revise the tender," Broadspectrum chief executive Graeme Hunt said.
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"We believe that, because of our incumbency and strong track record in Nauru and Manus Province, we're in a strong position to secure the new five-year contract."
The 12-month extension takes effect on March 1 and will last past the 2016 federal election, which is due later this year.
Broadspectrum upgraded its full year underlying earnings guidance to between $280 million and $300 million, lifting it from $265 million to $285 million as a result of the new 12-month contract.
It said underlying earnings for fiscal 2017 should be in excess of $300 million.
Broadspectrum reiterated its advice to shareholders to reject a $692 million takeover offer from Spanish company Ferrovial as neither fair nor reasonable, issuing a supplementary target statement with the updated guidance.
Independent adviser Ernst & Young previously valued Broadspectrum shares at between $1.71 and $1.98, well below Ferrovial's $1.35 per share offer.
It has revised down its valuation to $1.60-$1.85, but maintained its view that the offer is not fair.
Broadspectrum shares closed up 4.5 cents, or 3.72 per cent, at $1.255.
The offer closes on February 22.
