European shares flat, consolidation hopes boost Iliad
* FTSEurofirst 300 index steadies in late trading
* Iliad, Bouygues up on sector consolidation hopes
* Miners slip on global growth concerns
By Atul Prakash
LONDON, June 12 (Reuters) - European equities steadied near recent multi-year highs on Thursday as a rally in some telecom stocks on merger hopes in the sector was offset by a sharp decline in mining shares driven by global growth concerns.
The FTSEurofirst 300 index of top European shares was up flat at 1,391.76 points by 1345 GMT, hovering just below this week's 6-1/2-year high.
However, Iliad rose 6.3 percent, the top gainer on the FTSEurofirst index, and Bouygues advanced 5.3 percent on expectations of more consolidation in the French telecom sector.
Economy Minister Arnaud Montebourg said on Thursday the government still wants to reduce the number of mobile telecom operators in France to three from four to bring an end to the "destructive spiral" of falling prices.
"You have seen signs of consolidation and we have got some more this morning. Consolidation is a good thing for the sector as it improves their market power and pricing, which has been a key issue holding back earnings in the sector," Macquarie strategist Daniel McCormack said.
"The trend could extend beyond telecoms as a lot of European corporates are pretty cashed up and they could be looking for opportunities to buy other companies."
However, gains in some shares were capped by a sharp decline in mining shares related to concerns about global economic forecasts and a decline in copper prices towards one-month lows.
The World Bank trimmed its global growth forecast this week, saying a confluence of events - from the Ukraine crisis to unusually cold weather in the United States - dampened economic expansion in the first half of the year.
Miners Anglo American, Rio Tinto and BHP Billiton fell from 1.4 to 3.2 percent as investors fretted about demand especially in top consumer China.
Analysts advised caution in the near-term, but stayed positive on the market's longer-term outlook.
"Rock-bottom interest rates are triggering a real change in paradigm for investors who have to completely rethink their asset allocation, and equities are set to benefit from this," said Frederic Biraud, head of B*Capital, a Paris-based brokerage and wealth management firm.
"A lot of investors still have low exposure to stocks, and it's becoming unbearable. Rates are so low that you get next to nothing by investing in fixed income products, even in the corporate space, while stocks offer much better returns.
"People are warming up to that but there's still a long way to go in terms of allocation moves."
Among individual movers, Alstom rose 1 percent after Hitachi said it would join bidders for the French group's energy business countering an offer from General Electric.
BNP Paribas was also in the spotlight, gaining 0.5 percent after the bank, which is wrestling with U.S. authorities over a potential $10 billion fine, said its chief operating officer will step down at the end of the month.
Stock markets in Paris, Amsterdam, Brussels and Lisbon opened 30 minutes late on Thursday due to a technical glitch at market operator Euronext.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v