European stocks gain on EDF, Buffett investment plan

* FTSEurofirst 300 rises 0.4 pct

* EDF, British Energy gain on takeover bid news

* Banks gain, Warren Buffett's investment plan helps

By Atul Prakash

LONDON, Sept 24 (Reuters) - European shares rose early on Wednesday, helped by EDF's (EDF.PA: Quote, Profile, Research, Stock Buzz) agreed bid for British Energy (BGY.L: Quote, Profile, Research, Stock Buzz) and news that Warren Buffett's Berkshire Hathaway Inc will invest $5 billion in U.S. Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz).

By 0846 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,113.30 points after rising as high as 1,116.45. The benchmark closed 1.6 percent lower on Tuesday and is down about 26 percent so far this year.

A move by central banks to inject money into the financial system also lifted sentiment.

The U.S. Federal Reserve moved for the second time in 24 hours to keep the wheels of the financial world turning, acting in concert with Australia and Scandinavia to supply money markets with $30 billion in funds. [ID:nSP163976]

The European Central Bank, the Bank of England, the Bank of Japan and Australia's central bank have also once again injected billions of dollars into their banking systems to stop banks from hoarding cash.

Banks were some of the top weighted gainers on the index, with BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz), Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz), Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) and Dexia (DEXI.BR: Quote, Profile, Research, Stock Buzz) rising between 0.3 and 3.3 percent.

In a big boost for Goldman, investor Buffett is adding the Wall Street bank to a portfolio of investments at Berkshire that includes large stakes in a handful of major U.S. commercial banks. [ID:nN23412774]

"Buffett's legendary status as a value investor gives the bulls reason for optimism, as some will see his move as a sign to call the bottom of the recent declines," said Chris Hossain, senior sales manager at ODL Securities.

"M&A seems to be temporarily in fashion on this side of the Atlantic too, with EDF confirming that they have launched a bid for British Energy," he said.

French utility EDF (EDF.PA: Quote, Profile, Research, Stock Buzz) rose 5.4 percent. The company launched a 12.5 billion pound ($23.14 billion) agreed takeover bid on power producer British Energy (BGY.L: Quote, Profile, Research, Stock Buzz), in a move designed to help to secure Britain's nuclear future. [ID:nLO702516]

EDF, the world's biggest maker of nuclear energy, said on Wednesday it offered to pay 774 pence per British Energy share.

British Energy shares were up more than 6 percent.

Across Europe, Britain's FTSE .FTSE was up 0.1 percent, Germany's DAX .GDAXI gained 0.2 percent and France's CAC .FCHI was up 0.1 percent.

CAUTIOUS TRADE

But investors remained cautious in picking stocks as the Bush administration's push for quick congressional approval of a $700 billion bailout for financial firms hit a wall of opposition on Tuesday among senators who said the plan puts taxpayers at excessive risk.[ID:nN23313135]

U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke both warned that financial market turmoil has grown in severity and posed a threat to the broader economy that won't ease until confidence is restored.

In Europe, German corporate sentiment deteriorated by more than expected in September to its lowest level since May 2005 as firms became less confident after turmoil in financial markets, Munich-based Ifo economic research institute said.

Commodity stocks fell despite a rise in crude and metals prices. Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), Vedanta Resources (VED.L: Quote, Profile, Research, Stock Buzz), Lonmin (LMI.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), Antofagasta (ANTO.L: Quote, Profile, Research, Stock Buzz) fell between 0.3 and 3.1 percnet.

BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), gas producer BG Group (BG.L: Quote, Profile, Research, Stock Buzz) and Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) shed between 0.1 and 2.6 percent.

Shares in Arcandor (AROG.DE: Quote, Profile, Research, Stock Buzz) rose 8.6 percent after the German retail and tourism group said it had agreed a financing concept with lead banks and credit insurers to obtain necessary credit lines.

Arcandor also reiterated it has no plans to sell its stake in travel company Thomas Cook (TCG.L: Quote, Profile, Research, Stock Buzz). [ID:nWEA0517]. (Editing by Sue Thomas)