BAE shares down after UAE ends Typhoon talks

LONDON, Dec 20 (Reuters) - BAE Systems shares fellon Friday after the United Arab Emirates (UAE) quit talks to buyEurofighter Typhoon aircraft, delivering a blow to the Britishdefence company that had pushed hard to land the $9.8 billiondeal.

British Prime Minister David Cameron had travelled to theUAE last month to add weight to month of lobbying for theEurofighter contract, which BAE had said could be a "major gamechanger".

Analysts at JP Morgan Cazenove said the termination of thetalks was a major setback for BAE Systems, noting the contractcould have been worth around 45 pence per BAE share.

In a statement issued late on Thursday, BAE also said it hadstill not reached agreement with Saudi Arabia over the pricingof Eurofighter jets in another deal.

The continued delay of the so-called Salaam deal has pushedBAE to repeatedly trim its full-year earnings forecasts, and JPMorgan Cazenove analysts said the failure to reach agreement wasperplexing.

"In theory this should be easy to resolve," they said,adding that the amount of money at issue in the disagreement,over whether the original price agreed included inflation, wasonly about 600 million pounds.

Shares in BAE Systems were trading down 4.8 percent at 420.8pence at 0925 GMT on Friday, the biggest fallers in the FTSE 100index. ($1 = 0.6111 British pounds) (Reporting by Paul Sandle; Editing by David Holmes)

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