Britain's FTSE touches fresh year-high, though Randgold Resources falls

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* FTSE 100 up 0.1 pct, touches fresh year-high

* Randgold Resources falls on production cut

* William Hill (Other OTC: WIMHF - news) jumps after receiving takeover bid

By Kit Rees

LONDON, July 25 (Reuters) - British shares advanced on Monday, briefly touching a fresh year-high, though Randgold Resources tumbled following a cut in its production forecast.

The gold producer, which has gained around 108 percent this year as investors sought safe-haven assets, was the biggest faller on the blue chip FTSE 100 index, dropping 2 percent after lowering its production forecast for its Tongon mine in the Ivory Coast.

Peer Fresnillo retreated as well, to trade 1.4 percent lower.

Analysts at Morgan Stanley (Xetra: 885836 - news) , however, said Randgold Resources' downgrade to its production forecast was unsurprising.

Oil majors Royal Dutch Shell (Xetra: A0ET6Q - news) and BP also lost ground, tracking a drop in the price of oil following concerns that global oversupply would continue to weigh on markets for some time to come.

The FTSE 100 was up 0.1 percent at 6736.54 points by 1014 GMT, having recorded its fifth straight week of gains in the previous session.

Private equity firm 3I Group was the top riser on Monday, up 2.8 percent, after a target price upgrade from investment bank Barclays (LSE: BARC.L - news) .

"3i is our sector Top Pick, due to its portfolio being defensive in nature with strong earnings growth, a healthy realization pipeline and low individual asset leverage," analysts at Barclays said in a note.

Likewise wealth manager St James's Place was also up more than 2 percent after Deutsche Bank (LSE: 0H7D.L - news) raised its target price on the stock.

Outside of the blue chips, bookmaker William Hill surged 6.8 percent after it confirmed it had received a takeover bid from Rank Group

William Hill said that it saw little merit in the merger, but investors disagreed.

"On a standalone basis, we believe William Hill's fundamentals at present are weak, the earnings momentum is not favourable and the road to recovery longer than consensus currently expects," Roberta Ciaccia, analyst at Berenberg, said in a note.

"We did not think William Hill could be a takeover target for any competitor given its size, and we certainly did not expect two players to form a bidding consortium." (Reporting by Kit Rees; Editing by Susan Fenton)