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* FTSE 100 ends 0.3 pct higher, up for third week
* Unilever shares soar on bid approach
* Commodities stocks slip on weaker oil and metals
By Atul Prakash and Helen Reid
LONDON, Feb 17 (Reuters) - Britain's top share index endedhigher on Friday as Unilever rallied after a surprise$143 billion takeover bid from Kraft Heinz Co, leadingthe index to its third straight week of gains.
The benchmark FTSE 100 index finished 0.3 percenthigher on the day and gained o.6 percent for the week. Theindex, dominated by companies that trade internationally, wasalso supported by weakness in sterling after a drop in Britishretail sales for January.
Unilever's rally stole the show, though. The shares surgedto a record high before finishing 15 percent higher, even asUnilever rejected the bid by Kraft Heinz, saying the deal had nofinancial or strategic merit.
"This is cheap money meeting industrial logic. Puttingportfolios of brands together can create huge synergies acrossmarketing, manufacturing and distribution," said Steve Clayton,a fund manager at Hargreaves Lansdown.
"Unilever were clearly in no mood to sell ... A short-termpremium today is no compensation for losing the growth thatUnilever could produce for decades to come. So to win over amajority of Unilever’s shareholders, we think Kraft Heinz willneed to dig very deep indeed."
Pharmaceuticals stocks were also in demand, with the sectorindex gaining 1.4 percent, supported by a rise inshares of AstraZeneca.
AstraZeneca rose 1.6 percent after saying that its drugLynparza, already approved to treat ovarian cancer, met the maingoal of helping breast cancer patients live longer without theircondition worsening in a late-stage study.
"The AstraZeneca turnaround story largely hinges on whathappens to its oncology portfolio, and progress with Lynparza isan important element of that turnaround," Berenberg analystssaid in a note.
Coca Cola HBC closed 4 percent higher after settinga record high. The soft drinks bottler extended Thursday's gainsafter well-received results, with JP Morgan, Exane BNP Paribasand Jefferies raising their price target for the stock.
However, gains in the broader market were capped by weakercommodities-related stocks following a fall in oil and metalsprices. The UK oil and gas index and the miningindex both dropped more than 1 percent.
Anglo American, BHP Billiton, Glencore and Royal Dutch Shell fell 1.3 to 1.8 percent.
Among mid-caps, shares in Essentra, a supplier ofspeciality plastic and packaging components, surged 15 percentafter its results. (Editing by Angus Larry King)