* Sees 10 percent rise in cash flow in 2009
* Cash flow for 2008 up 9 percent to 5.10 euros/shr
* Dividend up 13.8 percent to 5.70 euros/shr
* Recurring income in 2008 up almost 5 percent
* Shares plunge 11 percent
(Releads, adds analyst comment, updates shares)
By Sophie Taylor
PARIS, Feb 27 (Reuters) - Shares in Gecina SA suffered their biggest drop in two months on Friday after France's second-largest listed property company said it would buy a stake in a Spanish real estate firm.
Gecina said its wholly owned unit would pay 107.8 million euros for 49 percent of Bami, which was formed in 2007 as part of the separation agreement between the French firm and its shareholder Metrovacesa SA.
"Gecina's purchase of a company (Bami) which belongs to its own shareholders can only create uncertainty over the correct value of the deal," said Samuel Henry-Diesbach, analyst at Kepler Capital markets.
The Chairman and Chief Executive of Gecina, Joaquin Rivero, and board member Bautista Soler, together own 31 percent of Gecina as well as 84 percent of Bami.
Gecina's shares closed down 11 percent at 35 euros -- their biggest drop since Dec. 22 -- compared with a 2 percent fall in the pan-European FTSEurofirst 300 index.
At end-December, Gecina said it was temporarily suspending a separation agreement with Metrovacesa, in a process which has been rife with legal issues.
Metrovacesa owns a stake of nearly 27 percent in Gecina.
RESULTS PIP FORECASTS
Gecina posted earlier on Friday a 9 percent rise in cash flow per share, which trumped analysts' forecasts, and said it saw higher cash flow this year.
Gecina, which competes against Unibail-Rodamco SA and Klepierre SA, had 2008 cash flow per share -- a closely-watched measure in the property sector -- of 5.10 euros, against 4.67 euros a share a year earlier.
This compared with an average of forecasts by five analysts polled by Reuters for cash flow of 4.68 euros per share.
The rise reflected new buildings being rented out, and the group said its portfolio of residential buildings was a defensive asset in the current market turmoil as it has stable rents, high occupancy rates and limited turnover.
The group will continue asset disposals to cut debt.
Gecina said cash flow should rise by more than 10 percent in 2009, thanks to an expected reduction in costs as well as a rise in rents on a comparable basis.
Gecina said in a statement it would propose a dividend of 5.70 euros a share, up 13.8 percent on the previous year.
Diluted net asset value per share for 2008 fell 10 percent to 128.29 euros, compared with 142.55 euros a share a year earlier.
This result beat an average of forecasts by four analysts polled by Reuters Estimates for net asset value of 116.05 euros a share.
Recurring income in 2008 was 298 million euros, up 4.63 percent from 284.8 million euros a year earlier.
The company, whose predominantly office and residential portfolio was valued at 12.4 billion euros at the end of last year, has said it would pursue between 600 million and 700 million euros of assets disposals in 2009 in a bid to further reduce its debt.
Disposals made in 2008 represent 649 million euros in total, Gecina said. (Reporting by Sophie Taylor; Editing by Andrew Macdonald)