Britain's FTSE lags euro zone peers, Bunzl results weigh

* FTSE 100 up 0.2 pct

* Bunzl (LSE: BNZL.L - news) 's acquisitions make investors wary

* Broker upgrades fuel top FTSE risers

* Ladbrokes (LSE: LAD.L - news) tops mid caps after confirms merger talks

By Alistair Smout

LONDON, June 23 (Reuters) - Britain's top share index edged higher on Tuesday, lagging euro zone shares, with weak results from Bunzl capped the market.

The FTSE 100 was up 12.12 points, or 0.2 percent at 6,837.79 by 0801 GMT, hitting a new 11-day high as it extended gains from Monday, when it posted its strongest session since May.

The index lagged the blue-chip Euro STOXX 50, up 0.8 percent, boosted by hopes that Greece can reach a deal with its creditors this week as well as by a drop in the euro.

Business supplies distributor Bunzl contributed to the underperformance of the FTSE 100 after it said organic growth slowed in the first half of the financial year.

While the results were consistent with expectations, traders said that the acquisition of four new businesses had made investors wary.

"The fact they're about to splash the cash around is worrying investors... Reported performance didn't inspire either," Chris Beauchamp, market analyst at IG (LSE: IGG.L - news) , said.

Sports Direct, Sage Group (LSE: SGE.L - news) , Johnson Matthey (LSE: JMAT.L - news) and Intercontinental Hotels (Other OTC: ICHGF - news) were the top risers after target price hikes.

The blue chip index underperformed the mid caps, with the FTSE 250 up 0.5 percent.

Top mid-cap riser was Ladbrokes, up 9.9 percent after the company confirmed it was in merger talks with privately owned Gala Coral Group.

"This deal could help Ladbrokes move on from a more difficult past. If nothing else, increased size of business should reduce costs, and it's a welcome change of direction," IG's Beauchamp said.

Oil services firm Petrofac and Telecom Plus (LSE: TEP.L - news) were also among top FTSE 250 risers after reporting results.

(Editing by Jeremy Gaunt.)