Britain's FTSE hits 7-week high, Shire gains

* FTSE 100 index rises 0.4 percent

* Shire surges on report of new takeover bid

* St. James's Place gains on positive update

By Atul Prakash

LONDON, April 29 (Reuters) - Britain's top share indexclimbed to a seven-week high on Tuesday, boosted by merger andacquisition news and positive updates from companies such asWhitbread and St. James's Place.

British drugmaker Shire jumped more than 3 percent,the biggest percentage gainer on the blue-chip FTSE 100 index, after Reuters reported that Botox-maker Allergan Inc was preparing a fresh takeover approach.

British wealth manager St. James's Place was up 2.1 percentafter saying improved confidence among retail investors helpedit get a strong start in 2014. Whitbread, the owner of Britain'sPremier Inn hotel and Costa Coffee chains, rose 2 percent afterposting a 16.5 percent rise in full-year profit.

"Investors are waiting to see the start of some positiveearnings momentum, which has been missing in recent years. Anysign of a positive momentum is likely to support share prices,"James Butterfill, global equity strategist at Coutts, said.

"We are also witnessing the biggest indicative M&Aactivities since the credit crisis, highlighting that corporateconfidence is improving," he added. "A further rise in the GDPnumbers would suggest that the economy is back on a strongerrecovery path, confirming the strong PMI data."

Investors keenly awaited Britain's gross domestic productfigures, due at 0830 GMT, which are likely to show that thecountry notched up its fastest economic growth in nearly fouryears in the first three months of 2014.

Bank of England Governor Mark Carney said in an interviewpublished on Tuesday that Britain's economic recovery wasstarting to broaden and there were early signs it would besustainable.

The FTSE index was up 0.4 percent at 6,726.22 points by 0758GMT after hitting an intra-day high of 6,751.06 points, thehighest level since early March.

Among other movers, oil major BP rose 0.9 percentafter posting quarterly profit slightly above forecasts andraising its dividend for the second time in six months, in linewith an earlier pledge to focus on returning more cash toshareholders. (Reporting by Atul Prakash; Editing by Andrew Heavens)