European shares were steady yesterday, pausing for breath after last week's rally, as political tension over Iran and downbeat bank and utility shares offset oil stocks, which benefited from high crude prices.

The FTSEurofirst 300 index of top European shares was flat at 1,524.03 points, after rising every day last week, as merger and acquisition activity in two continuing sagas captured investor interest.

Shares in Spanish builder Acciona rose 2.6 per cent after it and Italian utility Enel said they would bid at least €41 a share for Spain's Endesa, trumping a raised bid from Germany's E.ON.

Endesa was up four per cent, Enel up 0.6 per cent and E.ON down one per cent.

"The struggle is going on," said Achim Matzke, head of global equity technical and index research at Commerzbank who said M&A was a key factor this session.

"We had a good week last week... so it is not surprising that we get a typical, normal consolidation day after the rally we saw last week."