* FTSEurofirst 300 ends down 0.3 pct
* Oil services bounce back on Technip's offer for CGG
* BBVA drops after setting terms of rights issue
By Blaise Robinson
PARIS, Nov 20 (Reuters) - European shares fell on Thursday as weaker than expected euro zone manufacturing data added to worries about the outlook for growth and triggered a sell-off in southern European stocks.
Shares in oil services companies, hammered by oil prices falling below $80 a barrel, bucked the trend after Technip made an offer for France's CGG, fuelling expectations of more consolidation in the sector.
CGG jumped 22 percent on news of a 1.5 billion euro bid from larger rival Technip, a bid that CGG rejected.
Short covering added to the rally as hedge funds scrambled to unwind negative bets on CGG, one of the most shorted stocks across Europe, Markit data shows.
Technip shares tumbled 7 percent. Fugro surged 4.7 percent, Saipem 2.8 percent and TGS 4.4 percent.
"It puts the spotlight on a sector which is at the start of a wave of consolidation, under pressure due to weakening oil prices. The rejected bid may open the door for other suitors," Barclays France fund manager, Renaud Murail, said.
The FTSEurofirst 300 index of top European shares ended 0.3 percent lower at 1,356.38 points.
Spain's IBEX lost 1.6 percent, hit in part by a 5.5 percent drop in the shares of BBVA, which on Thursday set the terms of a rights issue to fund the raising of its stake in Turkey's Garanti.
"It's a classic case of a drop in the shares of a company making an acquisition for which it will spend a lot of money," said Margarita Rivas, senior investment strategist at GVC Gaesco Valores in Madrid.
Italy's MIB index fell 0.9 percent and Portugal's PSI 20 dropped 0.6 percent.
Weighing on sentiment was data showing euro zone business growth has been weaker than any forecaster expected this month and new orders have fallen for the first time in more than a year despite further price-cutting.
In Asia, figures showed growth in China's vast factory sector stalled in November, with output contracting for the first time in six months.
European stocks have been oscillating in a tight range since late October as worries over the outlook for the global economy have been offset by a dovish tone from central banks.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Additional reporting by Alexandre Boksenbaum-Granier; Editing by Louise Ireland)