* FTSEurofirst 300 index rises 1 percent
* Media stocks up on M&A speculation related to ITV
* Novartis boosts drugmakers on new drug prospects
By Atul Prakash
LONDON, Sept 1 (Reuters) - European shares edged higher to trade near a recent one-month peak on Monday, with mergers and acquisitions speculation surrounding British broadcaster ITV helping media stocks and Novartis leading drugmakers.
Novartis, up 3.8 percent, was the top gainer on the FTSEurofirst 300 index on bets that a new medicine from the company could replace drugs that have been central to treating heart failure for a quarter of century.
Data released at the weekend beat expectations, showing the drug slashed deaths and hospitalisations, worked across all groups of patients, and had no serious side effects.
Novartis helped the STOXX Europe 600 Healthcare index to gain 0.8 percent, the top sectoral gainer, while ITV boosted the European media index, up 0.6 percent, following a British newspaper report, traders said.
The Telegraph reported that Liberty Global was canvassing support from major ITV shareholders following its acquisition of a 6.4 percent stake, raising speculation of a full takeover bid.
"Mergers and acquisitions speculation should continue to support the market going forward. We are likely to see M&A activities in other sectors also as companies are looking to utilise their cash balances," Keith Bowman, equity analyst at Hargreaves Lansdown, said.
"But investors will stay cautious as geopolitical concerns and uncertainty about the ECB's likely policy moves will remain in the background."
The FTSEurofirst 300 rose 0.1 percent to 1,374.54 points by 1123 GMT to trade near last week's one-month highs. The Euro STOXX 50, which will add Nokia from Sept. 22 replacing CRH after an index reshuffle, was down 0.2 percent. CRH fell 0.3 percent and Nokia dropped 1 percent.
Investors traded cautiously following lingering tension in Ukraine, weak economic data from China showing a slowdown in manufacturing activity, lower volumes due to a public holiday in the United States and ahead of Thursday's policy meeting of the European Central Bank.
ECB sources told Reuters last week new action was unlikely but not impossible, and that the barrier to some kind of quantitative easing was still "very high".
"At least for now quantitative easing hopes seems to trump absolutely everything including sharply escalating tensions in Ukraine and weak Chinese PMI figures," Markus Huber, a trader at Peregrine & Black, said.
"Still, in markets things like these can change very quickly and any sudden worsening of the situation in eastern Ukraine can push geopolitics quickly to the forefront again."
Tensions in Ukraine continued to put pressure on the market, with Raiffeisen falling 4.3 percent on concerns about further sanctions against Russia. The bank has about 2.8 million customers in Russia and is among the country's top 10 banks.
The tension also had an impact on leading economic indicators, with a business survey showing that euro zone manufacturing growth slowed more than initially thought last month as new orders dwindled and factories suffered.
Among other individual movers, Iliad fell 4.5 percent. The French low-cost telecom operator said it would continue its pursuit of T-Mobile US even though the owner of the U.S. mobile operator, Deutsche Telekom, had rebuffed its first bid as too low.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
Editing by Alison Williams