MEGAIN Holding (Cayman) (HKG:6939) said it may became the subject of a mandatory takeover offer after a possible change in the ownership of the business, according to a Hong Kong bourse filing Friday.

Shares of the cartridge chips company gained over 73% in morning trade Monday.

The firm said Geehy International had entered an agreement to acquire 211 million shares of the company from three substantial shareholders for HK$0.50 apiece, or HK$105.5 million in total.

Geehy International entered a further agreement with MEGAIN to subscribe to around 103.8 million shares of the company at HK$0.61 apiece. The sale will net MEGAIN HK$61.3 million in proceeds.

Following the transactions, Geehy will end up owning around 314.8 million shares of the company representing 50.56% of its enlarged issued share capital.

The buyer then plans to offer to acquire the rest of the company at HK$0.61 per share.

The three substantial shareholders who agreed to sell their shares will end up owning one-fifth of the business following the transactions and have already indicated they will not tender their remaining shares to the offer, MEGAIN said.

MEGAIN said it had formed an independent board committee to advise minority shareholders on the matter.