UPDATE 2-Australia's Nufarm ends bid talks with ChemChina

(Adds analyst comment, shares, byline)

By Ben Wilson

SYDNEY, Dec 10 (Reuters) - Farm chemicals maker Nufarm ended talks on a possible A$3 billion ($2.6 billion) bid from a group including China National Chemical Corp after the consortium was unable to make a formal offer, lopping 14 percent off its shares.

The surprise move comes as bidders find it more difficult to fund multi-billion dollar deals amid uncertainty in capital markets. Also on Monday, Australia's SP Ausnet SPN.AX ditched plans to pay A$8.3 billion for assets of former energy firm Alinta, blaming a market slump. [ID:nSYD6854]

China National Chemical (ChemChina) and two U.S. private equity firms, Blackstone Group (BX.N: Quote, Profile, Research, Stock Buzz) and Fox Paine Management, were given exclusive access to Nufarm's (NUF.AX: Quote, Profile, Research, Stock Buzz) books last month after approaching the Australian company with a plan to create the world's largest generic crop protection firm.

"You just have to put it all in the context of the global credit markets right now. It really has taken a nosedive for the worse in the last three weeks," a source close to the deal said.

Nufarm said it had been advised the consortium would not be able to formalise its offer by midnight on Monday, when the exclusivity period was due to end.

The source said Nufarm would still look at any proposal, but it appeared the consortium may not have been able to reach agreement on its bid structure and levels of debt.

Analysts said ChemChina and its partners might renew their interest, noting the failure to meet the deadline underlined increasing difficulties for private equity funding.