UPDATE 2-RPC ends merger talks with Bain, gives Apollo more time to offer

(Adds share move, background on RPC)

Dec 3 (Reuters) - RPC Group Plc said on Monday it had ended talks on a takeover with U.S. private equity firm Bain Capital, leaving Apollo Global Management in the lead to buy Europe's biggest plastics packager and sending its shares lower.

RPC said discussions with Apollo, a New York-listed private equity firm, were ongoing. It has given Apollo until Dec. 21 to make firm buyout offers or walk away, in the third extension of a deadline.

Shares of London-listed RPC fell 3.7 percent, erasing most of the 5 percent gain it has made since reports of merger talks appeared in September.

Asked by Reuters for more details on the reasons for the collapse of talks with Bain, the company declined to comment.

RPC, which provides packaging services to a range of products from coffee capsules to healthcare products with 188 operations in 33 countries, said last week earnings in the first half of the year had fallen 4.5 percent.

The packaging industry has seen a raft of deals this year, with Australia's Amcor Ltd buying U.S. firm Bemis Co for $5.25 billion and DS Smith Plc spending about $2.2 billion to acquire Spanish rival Europac.

RPC confirmed the merger talks in September after a Bloomberg report that it was exploring options including a sale.

The company had flagged in July that pressure from investors was preventing it from pursuing growth opportunities, and said it would focus on divesting non-core assets.

Private equity has long been drawn by packaging companies' reliable cashflow and exposure to growing demand for online shopping, with a spate of takeovers by the industry's bigger players further spurring their interest.

(Reporting by Muvija M in Bengaluru; Editing by Sai Sachin Ravikumar and Ed Osmond)