Adds details on dividends and board changes in paragraphs 1, 5-10

By Pietro Lombardi

MADRID, Feb 20 (Reuters) - Spain's Naturgy NTGY.MC pledged on Thursday to raise dividends until 2027, reshape the board of directors and increase its free float as it seeks to boost investor confidence following recent ownership changes at the power company.

Naturgy was the target of a failed takeover attempt last year and saw the entry of BlackRock BLK.N into its capital. More recently, Australian investment fund IFM, Naturgy's fourth largest shareholder, moved to seek a second seat on the board.

The performance of Naturgy's shares has also been hit by its limited free float - or shares available to the public for trading.

The company said it would raise the dividend paid out of 2024 results to 1.60 euros ($1.67) a share, up from 1.40 euros the previous year. Shareholders will see their remuneration gradually increased to 1.90 euros a share in 2027.

And at the next general meeting on March 25, shareholders will be asked to approve an expansion of the board to 16 members from the current 12, a change that would allow the company to meet IFM's request to have a second seat, it said in a statement.

Under the plan, Spanish holding firm Criteria, which owns a 26.7% stake, would have four seats on the board, up from three currently. BlackRock BLK.N - which got its stake through the acquisition of investment fund GIP - and private equity firm CVC CVC.AS each own more than 20%, and would both see their board representation increase to three from two at present.

Naturgy posted a 4.3% decline in 2024 net profit of 1.90 billion euros, hit by lower gas and electricity prices. Analysts polled by LSEG had expected 1.88 billion euros.

The company wants to buy up to 10% of its capital and then place the shares on the market to increase its free float and return to the main stock market indices, including MSCI.

If the plan moves ahead, it will pay 26.5 euros a share and expect its main shareholders to participate in the offer in proportion to their stake.

Naturgy shares traded 4.4% higher at 1013 GMT.

($1 = 0.9581 euros)

(Reporting by Pietro Lombardi;
Editing by Inti Landauro and Helen Popper)

((Pietro.Lombardi@thomsonreuters.com;))