Zodiac Aerospace rockets after Safran bid, European shares retreat

* Pan-European index falls 0.1 pct after choppy session

* ECB keeps rates, asset-buying plan unchanged as expected

* Zodiac Aerospace jumps after Safran's $9 billion bid

* Earnings lift Moneysupermarket, but Royal Mail down onresults

* Live markets: cpurl://apps.cp./cms/?pageId=livemarkets (Adds details, closing prices)

By Kit Rees and Danilo Masoni

LONDON/MILAN, Jan 19 (Reuters) - European stocks dipped onThursday, though Zodiac Aerospace's shares surgedafter a takeover offer by France's Safran andMoneysupermarket.com also jumped after it reportedstrong results.

Zodiac Aerospace rocketed 22.8 percent afterSafran offered $9 billion to buy the aircraft seat manufacturer.

After an initial positive reaction, shares in Safran turnedlower to end down 5.4 percent. Some analysts warned such atie-up is risky as Zodiac recovers from a nearly three-yearcabin production crisis.

"To be taking on Zodiac, with its recent execution issues,is arguably doubling up on risk," Vertical Research Partnersanalyst Rob Stallard said in a note.

Earnings boosted shares in Moneysupermarket.com by7.9 percent to their highest level since May 2016 after theprice comparison website reported better-than-expected fourthquarter and full year revenues.

Dutch-Belgian food retailer Koninklijke Ahold Delhaize also rose, up 5.9 percent after posting strong fourthquarter sales figures.

Its strong gains helped Europe's STOXX Retail index rise 0.9 percent, the biggest sectoral gainer on the day.

Royal Mail's results were badly received. Its sharesfell 6 percent, weighing on the blue chip FTSE 100 index, which dropped 0.5 percent.

Analysts flagged further weakening in Royal Mail's UKletters business as a concern.

Shares in Italian eyewear maker Safilo fell 13.9percent after reports French luxury group LVMH wouldtake a stake in rival spectacle manufacturer Marcolin.

The pan-European STOXX 600 index ended down 0.1percent after a choppy day. Volatility was boosted by remarksfrom European Central Bank chief Mario Draghi following thebank's widely expected decision to keep rates and its assetspurchase programme unchanged.

Traders said they welcomed that the ECB stuck to itssuper-easy policy as growth improved and viewed as a relief thefact that the bank did not discuss a tapering of its assetpurchases. Draghi also played down a recent rise in euro zoneinflation.

But after surging as much as 0.3 percent as Draghi spoke,the STOXX dipped back into negative territory.

"Despite recent economic and inflation data improvement, theECB tone has not changed since December, raising potentialdownside risks and the willingness to stay loose," said AntoineLesne, EMEA head of ETF strategy at SPDR ETFs, part of StateStreet Global Advisors.

"This may come from the potential skew that the politicalagenda brings to stability in the Euro area in the spring." (Additional reporting by Danilo Masoni in Milan; Editing byGareth Jones)