* FTSE 100 up 0.6 pct; dropped 2.6 pct last week
* Shire up 2.3 pct on new AbbVie offer
* Sports Direct boosted by partnership with MySale
By Francesco Canepa
LONDON, July 14 Britain's top equity index rose
for a second straight day on Monday, helped by a rally in Shire
after the drugmaker got an increased takeover offer from
the U.S. drug company AbbVie.
Shares in Shire reached a record high after its board said
it was ready to recommend a new offer from AbbVie. The new bid -
the fifth by AbbView - values Shire at 31.3 billion pounds
Some traders saw the announcement as opening the door to
further bids, with AbbVie's 53.20-pounds-per-share offer
becoming a floor.
"We believe that Shire's board was keen to have the
proverbial bird in hand," a London-based event-driven trader
"The board could have been minded to accept AbbVie's offer
as a floor and as it has now established that it is willing to
sell the company (unlike AstraZeneca ), is effectively
putting a for-sale sign in the window."
AbbVie, which wants to buy Shire to cut its tax bill and
diversify its product line-up, made the offer after Dublin-based
Shire asked for an improvement on the previous
Other traders were more cautious on Shire's stock, which has
surged more than 40 percent in the past month.
"What we're doing this morning is basically closing down,
per client, half of the exposure, so we're banking something
good on the bounce and leaving the other half on just in case
(it climbs to 53)," said Galvan's head of trading, Ed Woolfitt.
Shire shares rose 2.3 percent to 4,984 pence. Volume rose to
60 percent higher than its full-day average for the past three
months by 1028 GMT. FTSE 100 volume was less than a quarter of
the index's own average.
The FTSE 100, which dropped 2.6 percent last week to
post its biggest weekly drop since March, had climbed 41.45
points, or 0.6 percent, to 6,731.62 points.
Investors had put aside concern about euro zone banks and
looked ahead to corporate earnings, traders said.
"Corporate earnings have started to trend to the upside and
momentum indicators suggest we are going to continue to see
forward-looking estimates improve alongside EPS estimates,"
Guardian Stockbrokers' director of trading, Atif Latif, said.
Solid gains were also seen by sports retailer Sports Direct
, up 3.8 percent, after it announced plans to open in
Australia and New Zealand by forming a partnership with MySale
Group. MySale rose 4.8 percent.
Rolls-Royce also rise, tacking on 1.2 percent as
European planemaker Airbus began the Farnborough
Airshow by confirming it would sell revamped versions of its
A330 wide-body jet powered by Rolls-Royce Trent 7000 engines.
($1 = 0.5877 British pounds)
(Additional reporting by Tricia Wright; Editing by Larry King)