* To redeem up to 33.3 million shares at 10 euros each
* Euroclear to sell back entire stake
* Expects redemption to take place in early November
LONDON, Sept 29 (Reuters) - LCH.Clearnet, Europe's biggest independent clearing house, moved to shrink its shareholder base with an offer to buy out settlement house Euroclear's stake as part of a 444 million euro ($651 million) payout.
LCH, which has been under pressure to revamp its shareholder structure for months, said on Tuesday it would buy back up to 45 percent of its shares and pay a dividend to all its owners, mostly major banks that clear trades using its systems.
The announcement came as the clearer reported a net operating profit of 293.6 million euros in the financial year ended December 2008, up 14 percent from a year ago.
In July LCH turned down a takeover bid and its board rejected an alternative management proposal to buy back some shares and allow other owners to increase their stakes cheaply.
"The voluntary redemption is intended to give shareholders who will not benefit from reduced fees the opportunity to sell some of their shareholding in the company," Chairman Chris Tupker said in a statement on Tuesday.
The clearer plans to pay a dividend of 1.5 euros and redeem up to 33.3 million shares, or 45 percent of its share capital, at 10 euros each.
Euroclear, the settlement house that is LCH's biggest shareholder, said it intended to redeem its 15.8 percent stake, enabling LCH to work more closely with its customers. Euroclear and LCH are working on a joint plan to cut costs for clients.
Banks own 73.3 percent of LCH, while exchanges including the London Stock Exchange and the London Metal Exchange (LME) own a combined 10.9 percent stake.
In July LCH's board rejected a 12-euros-per share bid from a 14-member consortium including Deutsche Bank, ICAP and the LME, people familiar with the matter had told Reuters.
"In principle, we'd welcome any move that would align LCH.Clearnet's shareholding and governance structure more closely with its major users," said a spokesman for the consortium, now down to 12 members, which holds a combined 24.5 percent stake in LCH.
The LCH board, representing LCH's owners, also turned down a management proposal to buy back shares at 10 euros. Shareholders were offered the chance to increase their stakes instead at 1.5 euros a share, the people said.
LCH will send shareholders details of the redemption scheme before an annual meeting in mid-October. It expects the buyback will take place in early November.
In April, LCH rejected another merger offer from the U.S. Depository Trust & Clearing Corp (DTCC).
LCH cut tariffs for cash equities and energy markets leading to a fall in revenues of 73.2 million euros in 2008, and 393.4 million euros in the first seven months of 2009. It has since announced two more cuts to cash-equity clearing fees. ($1=.6822 Euro) (Reporting by Daisy Ku, editing by Will Waterman)