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UPDATE 2-Doubts over Mediclinic's $1.6 bln Spire bid knock shares

* Analysts say Mediclinic indicating no Spire deal possible

* Profit hurt by Al-Noor deal, falling margins at Swiss ops

* Mediclinic shares down 6.5 pct, Spire down 7 pct (Adds details, background, shares, analysts' comments)

Nov 16 (Reuters) - Expectations that Mediclinic International Plc would succeed in taking over Britain's Spire Healthcare Group fell on Thursday after South Africa's largest private hospital group said no deal had been reached.

Mediclinic shares slipped as much as 6.5 percent to their lowest level since February 2014, while Spire, which has rejected an initial bid, saw its stock drop by more than 7 percent to 276 pence, well below the 298.6 pence offer price.

"No agreement has yet been reached on any of the key terms of an offer," Mediclinic, which also reported a 11 percent drop in its first-half profit, said in a statement.

Spire rejected Mediclinic's 1.2 billion pound ($1.6 billion) offer last month, saying it "undervalued" Britain's second-largest healthcare company.

Liberum analysts said that Mediclinic's announcement hinted that no deal was possible, while Jefferies analysts said that the company was striking a more cautious note.

Mediclinic, which owns 29.9 percent of Spire, had offered a 14.2 percent premium to Spire's closing share price on Oct. 20, the last trading day before the approach was announced. Spire shares have risen as high as 296.6 pence since then.

Liberum analyst Graham Doyle said he expects any further bid from Mediclinic to exceed Spire's fundamental worth of about 270 pence, adding that it appeared Mediclinic was hoping for an extension request from Spire.

Mediclinic has until 1700 GMT on Nov. 20 to either make a firm offer for Spire or walk away.

MIDDLE EAST DROP

Mediclinic's underlying earnings fell to 84 million pounds ($110.64 million), or 11.3 pence per share, from 94 million pounds, or 12.8 pence, a year ago.

Earnings before interest, tax, depreciation and amortization (EBITDA) in its Middle East business fell more than 20 percent in the six months to Sept. 30.

Mediclinic expanded into the United Arab Emirates with the acquisition of Al Noor in 2015. While this has helped double the company's exposure there, new health insurance regulations by the government have hurt its operations.

For example, a co-payment system for private healthcare in Abu Dhabi, which took effect in July 2016 and was scrapped in April this year, weighed on the firm's business.

EBITDA at its Swiss-based Hirslanden fell marginally with underlying EBITDA margin decreasing to 17.4 percent from 18.6 percent, hurt by lower patient volumes, and investment costs. ($1 = 0.7579 pounds) (Reporting by Justin George Varghese in Bengaluru; Editing by Gopakumar Warrier and Alexander Smith)