European shares steadied near multi-year highs in early trading on Tuesday, with sentiment remaining positive on strong results from companies such as EADS and merger and acquisition news.

United Utilities climbed 4.3 percent to become the top gainer on the FTSEurofirst 300 index after peer Severn Trent, a British water company, confirmed it had received a takeover approach from a consortium including Borealis Infrastructure and the Kuwait Investment Office.

Severn Trent surged 18 percent.

EADS climbed 1.8 percent after the passenger jet maker's core profit rose sharply in the first quarter as it raised output of its most profitable planes.

The corporate results followed Monday's better-than-expected retail sales data, prompting investors to increase their equity portfolios.

"The most recent batch of economic data, especially the strong retail figures out of the U.S. yesterday, look better. Hopes of a recovery in the second half of the year could provide markets with another leg to support the rally," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.

At 0723 GMT, the FTSEurofirst 300 index was flat at 1,230.37 points and hovered near last week's five-year highs.