* FTSEurofirst 300 up 0.7 pct
* Shire to recommend shareholders accept AbbVie offer
* BES still weak after triggering market sell-off last week
EDINBURGH, July 14 (Reuters) - European shares rose on Monday, boosted by M&A activity in the pharmaceutical sector and rallying from near two-month lows after their biggest weekly loss in four months.
UK-listed pharmaceutical Shire rose 2.6 percent after it said it was ready to recommend a new 53.20 pound ($90.53) per share offer from US firm AbbVie.
Reuters had reported on Saturday that Shire had asked AbbVie to sweeten its offer to close to 53 pounds in order for it to recommend the deal.
Shares in Shire touched an all-time high of 50.45 pounds.
"AbbVie are coming in at a decent level," said Manoj Ladwa, head of trading at TJM Partners.
"It's attractive to Shire shareholders and I think they'll take it - AbbVie sounded their key shareholders out and I think a fair level has been reached."
The pan-European FTSEurofirst 300 was up 0.7 percent at 1,361.91 by 0813 GMT having fallen 3 percent last week - its biggest drop since March.
Portugal's biggest listed bank Banco Espirito Santo was down 2.3 percent.
The stock has fallen nearly 40 percent in five days, and was at the centre of global market jitters late last week after the disclosure of financial irregularities at a web of family-held holding companies behind the lender.
Portuguese blue chip shares rose 1.3 percent, recouping part of a 10 percent fall last week, with traders saying contagion from BES to the rest of the market was limited.
Credit Suisse remained underweight Portuguese equities despite a broadly positive view of peripheral Europe, citing its private sector debt levels, which are the highest of any developed nation, poor economic momentum and risk of deflation.
The investment bank cuts its overweight in continental Europe to 8 percent from 13 percent, saying that economic data was poor and the short-term outlook for earnings worse.
"However, over the next 3 years, our base case forecast is for 39 percent (earnings) growth, higher than our US forecast of 28," analysts at Credit Suisse said in a note, saying that should economic data get much worse, the European Central Bank would implement a quantitative easing asset purchase programme.
($1 = 0.5877 British Pounds)
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by John Stonestreet)