Packaging firm DS Smith ended the day among the highest risers on the FTSE 100, helping London's top flight begin the week in positive territory.
The firm's shares hit a record high on Monday after the company unveiled plans to snap up rival Europac in a £1.7 billion deal.
The company said the acquisition - which is offering 16.80 euros (£14.68) per Europac share - will strengthen its global supply chain and provide an "exceptional" opportunity to scale the business.
David Madden, market analyst at CMC Markets, said: "The company is planning on funding the takeover by conducting a rights issue and taking out a loan.
"The two companies have little overlap in terms of clients and DS Smith predicts the deal will lead to savings of 50 million euros (£44 million), due to synergies. The firm issued a bullish outlook, and is also keen to expand in the US."
DS Smith's shares closed the session 16.8p higher at 579.2p, with analysts saying shares could target 600p.
It helped push London's top flight higher, with the FTSE 100 ending 0.51% or 39.52 points up at 7,741.29, while the Dax in Germany and the Cac 40 in France were up 0.37% and 0.17% respectively.
European indices also pushed higher as political upheaval on the continent calmed.
Spain appointed a new prime minister at the end of last week, after Mariano Rajoy was ousted.
And in Italy, parties looked close to forming a government (albeit the anti-establishment Five Star Movement and League Party).
Sterling struggled to gain ground after data showed that output in the construction industry held steady in May, with firms still playing catch up from a period of severe weather in the first quarter.
The Markit/CIPS UK Construction purchasing managers' index (PMI) remained at 52.5 last month, beating consensus estimates which predicted a reading of 52.
Sterling fell 0.27% against the dollar to 1.331. Against the euro, the currency was down 0.35% at 1.138.
In oil markets, prices slid on fears that Russia and Saudi Arabia could increase production.
The Organisation of Petroleum Exporting Countries is due to meet this month, and there is speculation that the exporters could ramp up supply levels. Towards the end of trading, Brent crude was down 1.21% at 75.660 US dollars.
CYBG shares rose by more than 2% on Monday after the bank sweetened its offer for Virgin Money.
A joint announcement by the two firms confirmed they were in talks over the proposed all-share deal, which would give 1.2125 new CYBG shares for each Virgin Money share. Shares in CYBG closed the day 2.19% or 6.4p higher at 298.2p.
Mothercare faced embarrassment when it announced creditors had not approved its restructuring plan in full.
The embattled retailer said on Monday that rent reduction proposals for Childrens World, a subsidiary that houses 21 of its stores, had been knocked back by landlords following a vote last week, meaning the fate of around 300 workers remained undecided. Shares closed the session 3.23% or 1p higher at 32p.
The biggest risers on the FTSE 100 were easyJet up 66.5p to 1,780p, Johnson Matthey up 116p to 3,771, DS Smith up 16p to 578.4p and United Utilities up 21.6p to 801.4p.
The biggest fallers on the FTSE 100 were Smurfit Kappa down 222p, Evra down 14p to 508.6p, Shire down 92p to 3,943p and Mediclinic International down 9.6p to 598p.
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