UPDATE 1-Astellas plans to retire 28 mln treasury shares-Nikkei

June 9 (Reuters) - Astellas Pharma Inc 4503.T, Japan's second-largest drugmaker, plans to retire 28 million treasury shares later this month, and to increase its annual stock dividend by 5 yen in fiscal 2009, the Nikkei business daily reported.

Last fiscal year, the company spent more than 120 billion yen ($1.22 billion) to acquire 28.08 million of its shares. By retiring a large chunk of that on June 23, Astellas will lower its share of treasury stock to outstanding shares to about 1 percent from about 7 percent, the paper added.

The move will help alleviate stockholder concerns about a potential dilution in earnings per share that would result if the stock were to be released, the Nikkei said.

The paper also said Astellas would now pay an annual stock dividend of 125 yen a share for fiscal 2009.

$1=98.36 Yen Reporting by Dhanya Ann Thoppil in Bangalore; Editing by Aradhana Aravindan