Britain's FTSE creeps higher, led by Shire
* FTSE 100 up 0.1 percent
* Shire advances on hopes for improved bid
* EasyJet falls; BofA ML cuts to "underperform"
By Tricia Wright
LONDON, June 30 (Reuters) - UK shares inched up on Monday, led by Shire on expectations of a higher offer for the drugmaker from U.S. suitor AbbVie.
Shares in Shire advanced 1.6 percent, the top blue-chip riser, following media reports that AbbVie's boss is set to fly to London this week to court Shire's shareholders and attempt to convince them of the merits of a potential takeover.
This could culminate in an increased bid, traders said, with Shire having spurned a $46 billion takeover offer from AbbVie as inadequate.
"They're pretty committed to getting this working and it's obvious they're going to have to pay up for it, so I imagine there will be a higher offer coming," Joe Rundle, head of trading at ETX Capital, said.
Trading volume in Shire was robust, at half of its 90-day daily average after just an hour's trade, against the FTSE 100 on just 9 percent of its average.
Budget airline easyJet was the worst performer on the FTSE 100, off 4.5 percent, as BofA Merrill Lynch cut its rating on the stock to "underperform" from "neutral", with earnings headwinds likely to pressure stock price performance.
"We believe the consensus EPS upgrade story is over at easyJet, as negative yield momentum will cause confidence in the upgrade cycle to shatter," BofA ML analysts wrote in a note.
The broader FTSE 100 was up 0.1 percent at 6,764.28 points by 0810 GMT, meaning it is broadly flat this year, against a rise of around 4 percent seen from the euro zone's Euro STOXX 50.
Britain's underperformance against the rest of Europe has been exacerbated by further monetary easing in the euro zone, which has strengthened the pound in comparison to the euro, having an impact on exporters.
This has seen the FTSE 100 remain in a 200 point range since the start of May, while other European indexes have pushed up to multi-year highs, bolstered by stimulus from the European Central Bank.
And, with interest rate rises in Britain remaining on the horizon as the country's economy grows robustly, investors are reluctant to place big bets on the market.
"I would not be in a rush to buy with the next move in rates up and a strong sterling hurting exporters," Lex van Dam, hedge fund manager at Hampstead Capital, said.
(Reporting by Tricia Wright; Editing by Alison Williams)