The shares had lost nearly half their value since Hong Kong-listed A-Max said in November it would raise its stake in Greek Mythology (Macau) Entertainment Group to 49.9 percent from 19.9 percent by buying almost half the shares held by Macau businessman Ng Man-sun. A condition of the deal required Ng, the largest single shareholder in A-Max with about 10 percent of the company, to sell his holding of notes that could be potentially converted into a 49.5 percent stake in A-Max. A-Max said Monday that Ng had sold the notes, which represent HK$2.8 million A-Max borrowed in 2004, to Chen Peizhen, who it described as an investor in mainland properties, for HK$5.6 million last Wednesday.

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The market capitalization of A-Max, which makes liquid crystal displays in China primarily for telecommunications equipment companies, is HK$1.12 billion.

The Greek Mythology deal may be canceled if the Hong Kong Stock Exchange does not accept that Chen is an independent third party, A-Max said in a separate circular Monday.

The circular reiterated the stock exchange's concerns that Ng may be taking control of, or injecting Greek Mythology Group into, A-Max. Under A-Max's 2004 borrowing agreement, each HK$200,000 convertible note can be converted into new shares equal to 5 percent of the company's outstanding stock. Conversions by any given group of holders, however, are limited to less than 30 percent of A-Max shares, the trigger level for a change of control under the Takeover Code.

As part of the Greek Mythology deal, A-Max is to issue Ng 1.07 billion of new shares, which will raise his stake in A-Max to 29.8 percent from 9.7 percent. The deal will reduce Ng's stake in Greek Mythology to 30.1 percent from 60.1 percent.

A-Max reported that Greek Mythology turned a net profit of HK$317.7 million on revenue of HK$624.7 million between September 13, 2004 and November 30, 2005.

Greek Mythology had previously announced that its casino generated about HK$227.2 million in gaming revenue in the first four months of 2005.

A-Max shares closed Monday up 5 HK cents to 35 HK cents.