The hostile takeover bid for cash-rich China Motor Bus (CMB) took a dramatic turn yesterday when a major shareholder of the company said he would sell his shares to corporate raiders Peter Fung Yiu-fai and Tony Fung Wing-cheung. Samuel Chee Sing-chung, son of Chee Ying-cheung who holds a 9.8 per cent stake, said yesterday his father would tender his entire stake 'very soon'. The revelation of support from a major shareholder gave a much-needed boost to the Fungs, both investment bankers, whose hostile takeover bid suffered a setback last month when their one HK cent per share offer attracted only 0.23 per cent of the shares. In a last-ditch effort to garner more than 50 per cent support, the mandatory level required to turn the offer unconditional, the Fungs yesterday lobbied hard to 100 minority shareholders at a meeting. 'The one cent offer provides us a way to obtain your authorisation in order to open the rice storage,' Peter Fung told the shareholders. 'Then, we will return the rice to you and charge a fee of HK$100 million, and that's all.' Mr Fung was referring to CMB's HK$4.15 billion of distributable reserve. The Fungs have promised to distribute a cash dividend of HK$43.71 per share within one year of their offer becoming unconditional. They have also pledged to distribute a bond worth HK$46.88 per share within two years, which can be cashed in after the Fungs divest the company's property portfolio. This means a potential total payout of HK$90.59 per share. CMB's shares closed on Friday 50 HK cents lower at HK$68. The company was set up in 1933, and now focuses on property development after losing its public bus franchise in 1998. Its strong asset portfolio and poor liquidity in share trading have attracted corporate raiders like the Fungs. However, the Fungs face several more hurdles in their takeover bid. CMB founding shareholder - the Ngan family - with a 42.45 per cent interest, has made a concerted effort to reject the offer and urged other shareholders to do likewise. The CMB board, which is largely composed of Ngan family members, has countered the takeover bid by declaring a special dividend of HK$18 per share provided that the Fungs offer falls through and there are no other takeover bids. The board argues that the Fungs offer effectively puts shareholders' interests at risk, and that 'every major element of the offer is defective and uncertain'. A confident Peter Fung, who is not related to Tony Fung, said the chances of them winning the support of shareholders was 50-50. 'There are three camps of shareholders in the company. The first one is minority tycoons collectively with about 25 per cent interest, the second one is substantial tycoons with 35 per cent and the third one is the Ngan family with about 42 per cent,' Peter Fung said. 'We want to wake up those minority tycoons who could have held the shares for decades or who could have forgotten their shares under the mattress. 'For the substantial tycoons, they're clever enough and don't need to be woken up,' he added. Mr Chee senior is among what Peter Fung described as substantial tycoons, as he has massed his 9.8 per cent stake over the past 15 years. 'My father has only one reason to support Peter Fung and Tony Fung - he wants to sell the stake and get cash,' Samuel Chee said. 'He will tender his shares very soon.' Other substantial shareholders have yet to reveal their intentions. They include Chan Kwan-shat with a 12.13 per cent stake, information-technology firm E-New Media Holdings with 4.37 per cent and a deceased shareholder with 8 per cent. One minority shareholder, who identified himself as Mr Yau, said the Fungs' offer was tempting as it provided a way out of the poor liquidity of the stock. However, another shareholder calling himself Mr Liu said the bond arrangement was risky as the offer did not offer enough comfort, since the second round of payouts would only materialise after the company's properties were sold.