THE feud between two generations of the Fung family, majority shareholders of publicly-listed Climax International, finally ended in with Friday's announcement by Wheelock and Co that it would buy a 25 per cent stake in the company. The family drama that unfolded in recent months was worthy of a television soap opera. On the one side was former Climax chairman Fung Kwong-fat, with the opposition being brought up by his younger brother and current chairman Fung Kwong-yan and the latter's son Kenneth Fung Chi-keung, now Climax's managing director. Climax International was finally taken over by Fung Kwong-yan after a long-running dispute with his older brother over the company's management policy. Soon after the dispute was settled, Wheelock was offered a 25 per cent stake in the company by Kenneth Fung, and the deal was concluded within a few days. Industry analysts believe the speed of the Wheelock stock purchase is attributable to a combination of Kenneth Fung's aggressive management style and the new direction of Climax. They add that the deal has already pushed up Climax's status in the market, although Wheelock will only be a passive investor in the company. Climax was formed by the Fung brothers in 1955 to produce commercial printed items such as Christmas cards and calendars. Anticipating increased demand, the group ramped up production of photo albums in 1975, and in 1989 expanded into the paper office supplies market. Listed in February last year, Climax was a major exporter of photo albums to North America and Europe. The Fung family feud began to ferment when Kenneth Fung proposed to implement certain aggressive strategies a year after the company went public. Those strategies were, however, not well-received by his uncle, then chairman of the company. Kenneth Fung is only in his late 20s and is regarded as an aggressive and ambitious entrepreneur by local merchant bankers. According to one merchant banker, Kenneth Fung wanted to expand the company in a big way, but his uncle did not agree with his ideas. However, Kenneth Fung was able to obtain the full support of his father, Fung Kwong-yan, to implement his strategies. The company only recorded a modest rise in profits for the year ended March 31, 1993, with its earnings per share falling 20 per cent during the period. That provided the ideal opportunity for Kenneth Fung to drive his point home, but this time the challenge to the old order was more direct. The dispute went public when the older Mr Fung and his children, Mei-lin and Hon-keung, were dismissed from the board of directors of Climax International at an annual general meeting (AGM) in August, resulting in the younger brother, Fung Kwong-yan, becoming chairman. Trading in Climax shares was suspended by the Stock Exchange on August 13 due to a dispute over the non-election of certain company directors, including the older Mr Fung and his children, at the company's AGM. The older Mr Fung's family queried the validity of the AGM proceedings. But opposition to the management takeover ended when the younger Mr Fung and his son Kenneth, after seeking legal advice, issued a joint public announcement with a third director to the effect that the AGM had been properly conducted. Last Tuesday, the company suddenly announced that Fung Kwong-yan and his family had agreed to buy the Climax shares of Fung Kwong-fat and his family. With the loss of control, Fung Kwong-fat had agreed to sell his shares in Climax for $1.70 per share and five cents for each warrant, making the total amount payable to him $246 million. At the same time, Kenneth Fung issued a statement clarifying the departure of the older Mr Fung from the company. ''The younger generation has adopted a different business philosophy which led to the departure of Mr Fung Kwong-fat, Ms Fung Mei-lin and Mr Fung Hon-keung from the board of directors,'' the statement read. According to a merchant banker, expanding companies often use rights issues to help them grow rapidly. It is believed that Climax's new management is considering such aggressive strategies to expand. According to Kenneth Fung, the company was a small scale operation that started its business with simple letter printing and gradually changed to offset printing. A number of changes implemented within the company over the years saw Climax keeping pace with the market in terms of modernisation of machinery, product development, and the expansion of its facilities. According to Climax's 1993 annual report, Fung Kwong-fat and Fung Kwong-yan were the two major shareholders of the company, with each holding 36.25 per cent through their individual family trusts. About 27.5 per cent of Climax shares are in the public's hands. As a result of the takeover, the Fung Kwong-yan family is required to make a general offer to the rest of the shareholders since its move has exceeded the 35 per cent limit set under current takeover rules. The price offered represents a 30 per cent premium over the closing price of Climax shares before trading was suspended on October 8. According to analysts, the older Mr Fung - although unwilling to turn his back on a business he built - sold his shares at a good price. And under the purchase agreement, the deal ''will allow the disagreements between the Fung Kwong-yan family and Fung Kwong-fat family to be resolved to their mutual satisfaction''. In addition, the statement issued by Kenneth Fung praised the contributions made to Climax by his uncle's family. ''In retrospect, Mr Fung Kwong-fat, his son and daughter made great contributions and established good reputation for the company. The business of the company was forged ahead by their earnestness and their particular attentions in distinguishing betweencompany and private interests.'' The statement also paid tribute to his uncle. ''Our company has been grateful to Mr Fung Kwong-fat and his son and daughter's generosity and their willingness to sell their shares in the company for the future sound management of our company.''