Macmahon Holdings has told Singapore contractor Sembawang Engineers and Constructors it cannot respond to a proposed bid for its construction business by a deadline tomorrow.

Sembawang today sent a more detailed proposal to Macmahon to buy the division for $38 million, subject to due diligence, and sought a response by 5pm tomorrow.

Macmahon reiterated that the proposal remained unsolicited, non-binding, incomplete and highly conditional.

"Accordingly Macmahon is not in a position to respond to the latest proposal by the deadline," the company said in a statement to the Australian Securities Exchange.

"In the circumstances, Macmahon's independent directors proposed to request further clarification from Sembawang to make a proper assessment of the merits of the proposals."