BUDAPEST, August 6, 2008 (AFP) - Hungarian oil and gas giant MOL welcomed on Wednesday a decision by Austrian rival OMV to drop its long-running takeover bid, but MOL's shares nosedived on the Budapest stock exchange.

Ever since OMV launched its bid for MOL last September, the Hungarian group has consistently rejected the approach as hostile.

OMV's surprise announcement on Wednesday to throw in the towel in face of EU opposition to the deal confirmed MOL's position, the Hungarian group said in a statement.

'As we have consistently maintained for over a year, OMV's irrational business plan for a tie-up raises very serious competition issues,' MOL said.

Its latest decision finally recognised that the deal was 'inherently value-destructive and would go against economic and strategic rationale,' the statement continued.

OMV still holds just over 20 percent in MOL, and the Hungarian said it would 'examine very closely' what the Austrian group decided to do with that stake.

For its part, the Hungarian government, which had also been fiercely opposed to a takeover of MOL by OMV, decided not to make any official comment, a government spokesman told AFP.

Investors nevertheless seemed disappointed that the takeover battle was now over and MOL shares were showing a loss of nearly five percent at 18,475 forint (78 euros) on the Budapest Stock Exchange in early afternoon trading.