European shares rise as bid talk offsets Ukraine worries

* New Ukraine worries cause DAX to underperform

* FTSEurofirst 300 closes up 0.3 pct at 1,343.27 points

* Alstom (Paris: FR0010220475 - news) surges on GE bid speculation

* Euro STOXX 50 rises 0.4 pct to 3,189.81 points

By Sudip Kar-Gupta

LONDON, April 24 (Reuters) - European stock markets rose on Thursday, as signs of a resurgence in corporate takeover activity offset lingering worries over Ukraine.

The pan-European FTSEurofirst 300 index, which hit a near 6-year high of 1,355.29 points earlier this month, closed up 0.3 percent at 1,343.27 points.

The euro zone's blue-chip Euro STOXX 50 index also rose 0.4 percent to 3,189.81 points.

High corporate cash piles and a slow improvement in the economic outlook for Europe are encouraging companies to start looking again at merger and acquisition opportunities.

On Thursday, shares in Alstom rose 10.9 percent after Bloomberg News reported that General Electric (Swiss: GE.SW - news) was in talks to buy the struggling French turbine and train maker.

Le Figaro newspaper said GE was only interested in Alstom's energy assets while Alstom itself said it had not been informed of any potential public tender offer.

Scania (Other OTC: SVKBY - news) also jumped 8.6 percent, after its fourth-largest shareholder said it would accept Volkswagen (Other OTC: VLKAF - news) 's takeover offer for the truck maker, improving prospects for the bid to go through despite strong opposition.

"The merger and acquisition activity we have been seeing is supportive and confirms our view that there is more value left in the European equity market," said Andrew Arbuthnott, head of European large cap equity at Pioneer Investments.

DAX UNDERPERFORMS

However, Germany's DAX equity index, which hit a record high of 9,794.05 points in January, underperformed gains elsewhere in Europe by closing up only 0.1 percent at 9,548.68 points.

Austria's ATX equity index also underperformed by falling 0.2 percent, and traders attributed this to signs of escalating tensions in Ukraine, since German and Austrian companies are among the most exposed in Europe to Russia and Ukraine.

Both indexes lost ground after Russian Defence Minister Sergei Shoigu was quoted by the Interfax news agency as saying that Russia had started military drills near the Ukrainian border on Thursday, in response to operations by Ukrainian forces against pro-Russian separatists and NATO exercises in eastern Europe.

However, Andreas Clenow, hedge fund trader and principal at ACIES Asset Management, said he saw Ukraine's troubles prompting short-term pullbacks rather than a more prolonged setback. "When the market gets scared - I'm a buyer," said Clenow.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (Editing by Susan Fenton/Ruth Pitchford)