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* EasyJet ( EJTTF ) climbs as Castlelake considers takeover bid

* Bluefield Solar Income Fund surges as Drax ( DRXGF ) agrees to

buy company

* ME Group slides after profit warning

June 1 (Reuters) - The main UK indexes kicked off June

on a sombre note on Monday, following fresh signs of economic

damage from the Middle East conflict, although M&A updates

helped lift some stocks.

The blue-chip FTSE 100 dipped 0.16% by 1017 GMT,

while the midcap FTSE 250 was down 0.11%. Both the

indexes marked a second month of gains in a row on Friday.

* EasyJet ( EJTTF ) shares jumped almost 10% after U.S.

investment firm Castlelake said it was considering a potential

takeover bid for the British budget airline.

* Bluefield Solar Income Fund surged 15.9%

after power group Drax ( DRXGF ) agreed to buy the renewable

energy-focused investment company in a deal valued at about £561

million ($755.3 million). Drax's ( DRXGF ) shares rose 1.8%.

* Bluefield Solar and EasyJet ( EJTTF ) were the top gainers in the

FTSE 250 index.

* Energy stocks, including BP and Shell,

rose about 1% each, tracking higher oil prices, as Iran and the

U.S. traded strikes and Israel ordered troops to move further

into Lebanon in its battle with Tehran-backed Hezbollah.

* British manufacturers raised their prices last month at

the fastest rate since June 2022 in response to a big increase

in costs as the Iran war disrupts supply chains, according to a

survey likely to concern the Bank of England (BoE).

* The BoE is closely watching the degree to which higher

energy prices caused by the closure of the Strait of Hormuz

spread through the economy, but it has kept interest rates

unchanged for now.

* ME Group International plunged 27% to a

more-than-three-year low after the instant-service equipment

group cut its profit before tax forecast for full year 2026, as

a shift in consumer spending patterns due to the Middle East

conflict hurt its revenue in April.

* Wise's London-listed shares tumbled 13%

after a report by the Bureau of Investigative Journalism said

the money transfer company is being investigated by prosecutors

in Belgium over €500 million ($582.5 million) worth of

suspicious transactions.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shinjini

Ganguli)