TSB leads rise in UK stocks as Sabadell makes takeover bid

* FTSE 100 and FTSE 350 indexes both up 0.7 percent

* TSB up 26 pct after receiving takeover bid

* Energy, mining shares rally on firmer commodities

By Atul Prakash and Francesco Canepa

LONDON, March 12 (Reuters) - UK shares rose on Thursday as a rebound in commodity prices boosted mining and energy stocks and domestic bank TSB surged on the back of a takeover offer.

Shares (Berlin: DI6.BE - news) in TSB, which was spun off from Lloyds and listed at 280 pence per share last year, rose 26 percent to 332 pence as it received a takeover bid from Spain's Sabadell for 340 pence.

"This more or less looks like a done deal," said Beaufort Securities sales trader Basil Petrides.

The stock was the top riser on the FTSE 350 index of UK shares, which was up 0.7 percent at 3,722.81 points at 1022 GMT.

The blue-chip FTSE 100 index was also up 0.7 percent, at 6,771.58 points. The index is up about 3 percent so far this year.

The UK mining index rose 1.4 percent and the oil and gas index was up 1.8 percent, with the sectors tracking a rally in copper prices after better-than-expected lending data from China.

A gain in oil prices as speculators covered their positions ahead of a contract expiry also contributed to the rise.

Commodity stocks Rio Tinto Anglo American Fresnillo (Other OTC: FNLPF - news) , Antofagasta (Other OTC: ANFGY - news) , Randgold Resources and Royal Dutch Shell (Xetra: R6C1.DE - news) rose between 2 percent and 3.6 percent.

"We're seeing some definite pickup in sentiment across the raw materials sector after it took a heavy battering," IG analyst Chris Beauchamp said.

However, Morrisons fell 0.4 percent after Britain's fourth biggest supermarket signaled it would cut its dividend in 2015 following its lowest annual profit in eight years, hurt by a fierce industry price war.

Among mid-cap firms, oil producer Soco International (LSE: SIA.L - news) slumped 27 percent after reporting a 54 percent fall in profits last year on the back of weak oil prices.

Another mid-cap firm Serco dropped 15 percent after kicking off a 555 million pound ($831 million) rights issue and saying it was unlikely to return to growth for another three years, as it reported a collapse in profits.

Several FTSE 100 companies fell after trading without the attraction of their latest dividend payouts. According to Reuters calculations, the effect of the resulting adjustment to prices by market-makers took 8.24 points off the index.

BHP Billiton (NYSE: BBL - news) , Direct Line Insurance Group and Hammerson (Other OTC: HMSNF - news) dropped 0.4 to 1.8 percent. (Additional reporting by Sudip Kar-Gupta; Editing by Tom Heneghan and Toby Chopra)