UPDATE 2-Czech CEZ says to double dividend, extend buyback

(Adds analyst comment)

By Jan Lopatka

PRAGUE, April 7 (Reuters) - The board of Czech power firm CEZ (CEZPsp.PR: Quote, Profile, Research) will propose doubling its dividend, cancel nearly 10 percent of shares and extend a buyback programme, the company said on Monday.

The decisions are in line with previous announcements by CEZ, which has been over-capitalised due to strong profits and cashflow and a lack of acquisition opportunities.

"Overall, more than 21 billion crowns ($1.32 billion) is earmarked for dividends," CEZ said in a statement. "The majority owner, the state, will receive more than 15 billion."

CEZ, the largest central European company with a market capitalisation of $45 billion, had earlier said it would raise the dividend payout ratio to 50-60 percent of net profit, excluding one-off gains, from 40-50 percent.

The electricity producer netted 42.76 billion crowns last year.

CEZ said it would also propose an annual meeting on May 21 to cancel shares bought in an ongoing buyback. The cancellation will not affect a small portion of shares earmarked for an option scheme, the company said.

It has bought back 9.37 percent of its stock, with a limit of 10 percent.