European shares led higher by dividend hikers Metro and LafargeHolcim

* FTSEurofirst 300 up 0.9 percent

* New (KOSDAQ: 160550.KQ - news) dividend from Metro (Other OTC: MTRAF - news) as restructuring pays off

* Housebuilders boosted ahead of UK budget update

* Shire (Xetra: S7E.DE - news) falls after Reuters reports of renewed interest in Baxalta (Berlin: 9BX.BE - news)

* Spanish banks lead IBEX lower

By Alistair Smout

LONDON, Nov 25 (Reuters) - European shares rose on Wednesday, buoyed after German retailer Metro and construction firm LafargeHolcim (Other OTC: HCMLY - news) both announced new dividends.

The pan-European FTSEurofirst 300 was 0.9 percent higher at 1,495.17, having fallen 1.6 percent over the first two sessions of the week.

German retailer Metro gained 5.2 percent after it raised its annual dividend more than expected and said it would pay out more of its profits every year from now on, citing the positive effects of restructuring and significantly improved net debt.

Analysts at Baader-Helvea equity research said that the dividend increase was above expectations and was "positive news and a strong sign."

LafargeHolcim was also buoyed by a dividend announcement, up 4.4 percent after it proposed a dividend that was higher than the one it suggested earlier this year, despite seeing profit miss expectations.

Traders said that while reported results were disappointing, prospects for the future looked much better, adding that with further stimulus anticipated from the European Central Bank next month, high-yielding stocks would remain in favour.

"With (Other OTC: WWTH - news) interest rates ultra low, it only serves to make these companies relatively more attractive. If the ECB ramps up its quantitative easing programme even more, that further boosts demand for dividend paying stocks" said Manoj Ladwa, head of trading at TJM Partners.

Also among top gainers were UK-listed housebuilders, with Persimmon (Other OTC: PSMMY - news) , Barratt Developments (LSE: BDEV.L - news) and Taylor Wimpey up 4-5 percent.

They received a lift as British finance minister George Osborne was set to outline an increase in spending on housing designed to encourage the construction of around 400,000 new homes. His budget statement is due at 1230 GMT.

Recent falls had seen the likes of Persimmon hit the its lowest levels since May in the previous session.

"Osborne is set to promote an increase in the number of homes being built. The fact that they've been a bit weak lately, and there's this positive catalyst from the UK government, it combines to help the sector quite nicely," TJM's Ladwa said.

On the downside, Shire fell 1.9 percent after a source told Reuters that the UK-listed pharmaceutical firm is preparing to make a new takeover offer for U.S (Other OTC: UBGXF - news) . biotech firm Baxalta.

The only major European share index to fall was Spain's IBEX , down 0.5 percent and led lower by its banks.

The EU's banking regulator said on Tuesday that Spain's banks had an average non-performing loan ratio of 7.1 percent, or 15.8 percent of its economic output, and that Spanish lenders had the lowest average capital ratio.

Concerns over engineering and renewables company Abengoa (LSE: 0NUI.L - news) 's insovlency proceedings also knocked its creditors, such as Santander. Trade in Abengoa was suspended.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up (Editing by Jeremy Gaunt)