* FTSE 100 up 0.2 percent
* Vodafone buoyed by bid speculation as VZW deal completes
* Analysts reckon index will hit all-time high in near term
* Talk of RBS restructuring boosts share price
By Joshua Franklin
LONDON, Feb 21 (Reuters) - Britain's top shares rose onFriday, lifted by bid speculation around index heavyweightVodafone and by investors welcoming possiblerestructuring plans at Royal Bank of Scotland.
Mobile operator Vodafone rose 2.3 percent to 235 pence andwas the most traded share on Britain's blue chip FTSE 100 index.
Traders highlighted comments by BofA Merrill Lynch and UBSthat Vodafone was a potential bid target after it completes thesale of its stake in U.S. mobile phone company Verizon Wireless.
UBS raised its target price on Vodafone to 275 pence from260 pence.
"'New Vodafone'... starts near a sector multiple at 6.1times, too low in our view," UBS said in a note. "If the marketdoes not realise this value, we wonder if a third party could."
Vodafone added the most points to the FTSE, with the indexup by 12.35 points, or 0.2 percent, at 6,825.34 points inmid-session trading, taking its rally since an early Februarylow to almost 7 percent.
This put the FTSE on track for weekly gains of around 2.5percent, its steepest weekly rise since December.
"The market is reasserting its strength, and I am inclinedto follow it," said Valerie Gastaldy, head of technical analysisfirm Day-By-Day, adding that the FTSE should soon be heading to its all-time high of around 6,950 points.
State-owned lender Royal Bank of Scotland also roseas analysts welcomed reports that the bank will cut its staff byup to a quarter, which could help lower RBS' costs.
"The government sell-off of Royal Bank feels a little wayoff but if this is as radical as we think it's going to be, thenI think it'll help in that process," said Numis analyst MikeTrippitt.
Shares in housebuilder Persimmon also rose 1.7percent, as JP Morgan analysts tipped the sector to continue tobenefit from a pick-up in the UK housebuilding industry.