The blue chip index fell into the red after earlier gains as US investor sentiment soured on the British American Tobacco (BATS) deal.
The FTSE 100 closed 0.1% lower at 7,020.
Pharmaceutical firms Hikma (HIK) and Shire (SHP) were among the biggest fallers.
West Texas Intermediate (WTI) crude oil nudged lower to $50.57, while Brent crude oil gained 0.3% to $51.56 per barrel, respectively.
FTSE 100 RISERS AND FALLERS
British American Tobacco (BATS) declined 2.8% before shares started to recover after announcing a $47bn offer to buy the 57.8% of US peer Reynolds American (RAI) it does not already own. It also delivered a robust third quarter trading update, showing good growth and increasing market share.
Media reports suggested that Burberry (BRBY) was working on a possible merger with US firm Coach, prompting shares in the luxury fashion house to climb 2.3% to £14.83.
Intercontinental Hotels (IHG) failed to impress investors following concerns over slowing growth in the third quarter.
FTSE 250 RISERS AND FALLERS
Acacia Mining (ACA) delivered impressive third quarter results, as gold production climbed by a quarter to 204,726 ounces and sales of the metal jumped by 24%.
Gaming technology firm Playtech (PTEC) was flat after revealing a £14.9m deal to buy bingo software play ECM Systems.
SMALL CAP RISERS AND FALLERS
Shares in Time Out (TMO) nudged higher following an all paper £2.4m deal for London-based booking platform YPlan.
Bushveld Minerals (BMN) raised £750,000 via a shares placing, which will be used for general working capital purposes.
Shares in Trinity Capital (TRC) soared 120.6% to 3.86p on the disposal of its investments in Trinity Capital One and Trinity Capital Five for approximately £8.8m.
Asian Investment Management Services purchased over one million shares in Chagala (CGLO) representing 6.02% of the company.
Customer acquisition specialist Digital Globe Services (DGS) rallied 79% to 59p and Ibex Global Solutions (IBEX) gained 27% to 109p as a major shareholder in both, The Resources Group International, announced £18.1m and £44.3m deals respectively to take them private.
Recruiter RTC (RTC) was on the red following a warning on profits after delays to infrastructure projects. Shares in the firm plummeted 18.2% to 43.78p.
Brick maker Michelmersh (MBH) warned investors about full year profits, which it blamed on increased competition and pricing levels not reaching the levels anticipated, causing a drop of 19% to 51p.
Diagnostic testing kit maker Immunodiagnostic Systems (IDH) failed to arrest declining revenue (on a constant currency basis) in its first half, triggering a share price drop of 17% to 172p.