BAE Talks Stall for ‘Typhoon’ Fighter

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Dec. 20 (Bloomberg) -- Bloomberg’s Hans Nichols reports talks ending between the UAE and BAE over their Typhoon aircraft, and Saudi Arabia discussing pricing for the same aircraft. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Why has it fallen apart?

We do not know.

Pricing, presumably.

This is over the euro fighter typhoon.

He comes on the heels of david cameron being in dubai for the error -- for the air show, really promoting british planes brought.

There is a separate deal, the saudi deal.

That appears to have stalled on prices.

It has not totally fallen apart.

The question with the uae deal, is this just them driving a hard bargain?

Using bae to jam down dassault from france?

They'll also fielded another offer from boeing.

This is just one giant arms dealing bazaar for who can send any kind of fighters to the united arab emirates cheaper.

They are trying to play these three defense contractors off each other to get the lowest price.

Either way, for the moment, it is bad for bae.

Calls went out this morning on the share down anywhere from 3%- 5%. we will see where this deal was priced in and what the stock does when it opens.

Let's talk about saudi arabia.

Bae holds their discussions with the saudi's. is that a more important deal?

The stock is now down 3.6%. so the stock is moving, 3.6%. that could be both on the uae deal, but also on the saudi deal.

The saudi deal is bigger, 72 jets.

That means about $7 million.

Bae has said that they're pricing and ability to get this deal done have to do with their billion pound share buyback.

If they do not finalize this deal by the end of the year -- excuse me, by the beginning of next year, they could say that earnings per share is down 6%- 7%. we will talk analysts and find out why it is diving.

We will get you a little bit later in the program.

Still with andy lynch, fund manager from schroder investment management.

On a global basis, as an investment manager, do you like defense?

Do you like american defense?

Do you like these kind of stories?

The defense sector is one we are under way.

-- underweight.

2 reasons.

One is austerity, reduction in government spending, less money to go around for defense.

More to fight over.

The second reason is that the countries where people are still spending, uae, saudi, they are extraordinarily savvy negotiators because they have a domestic defense industry they need to support.

They can get the international guys up.

If x is offering 10% off, are

This text has been automatically generated. It may not be 100% accurate.

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