UPDATE 1-Hungary's MOL to cancel treasury shares at AGM

(Adds analyst comment, share price)

BUDAPEST, March 21 (Reuters) - Hungarian oil and gas group MOL MOLB.BU said on Friday it was planning to decrease its share capital at its April shareholder meeting by withdrawing 5,483,775 treasury shares held by the company.

MOL said in an invitation for its April 23 annual shareholder meeting that the aim of the move was to boost shareholder returns.

MOL said its share capital would decrease to 104.19 billion forints ($626.3 million) thereafter.

MOL, which has been fending off an unsolicited takeover bid from Austrian rival OMV (OMVV.VI: Quote, Profile, Research) since last June, said earlier this year it would cancel some treasury shares at the AGM.

MOL has been buying up its own shares since the summer of 2007 and now controls around 44 percent of them through options, treasury shares and allies, including Czech utility CEZ (CEZPsp.PR: Quote, Profile, Research), which has a 7 percent stake.

Earlier this month MOL agreed to sell 8 percent of its shares to Oman Oil Co (OOC).

Analysts said the cancellation of treasury shares of around 5 percent would not have any major impact on the stock's price.

"If the proposal were only near 5 percent, we do not expect major market movements, and in this case we do not expect it (share price) to pick up considerably in the short run," Raiffeisen said in a note earlier on Friday.