Shares of Bright Dairy & Food, a Shanghai government-backed dairy products maker, surged to a record yesterday after a media report said Shanghai Industrial, one of its major shareholders, plans to offload its 30.78 per cent stake in the company. Mainland dairy giant Mengniu Dairy was reported to be one of the buyers of the stake. Both Bright and Shanghai Industrial denied the report, saying they have neither finalised the company's share reform plan nor intended to sell down its shares. Bright's shares in Shanghai gained 2.4 per cent to close at 5.54 yuan. In Hong Kong, Shanghai Industrial fell 0.92 per cent to $16.10, while Mengiu Dairy climbed 1.26 per cent to $8.05. According to the report, Shanghai Industrial wanted to sell its stake in Bright to avoid losses from the share reform plan. Shanghai Dairy, another government-backed firm which also has a 30.78 per cent stake in Bright, and Danone, the world's largest yogurt maker and a minority shareholder with an 11.5 per cent stake, were named together with Mengniu Dairy as interested parties for Shanghai Industrial's stake. But Mengniu spokeswoman Claudia Lo said the company had no acquisition plans with regard to Bright, although it was always looking out for buying opportunities. Bright, the country's third-largest dairy products maker, has grabbed 40 per cent of the Shanghai market and recorded a yearly turnover of one billion yuan. A source close to British private equity funds Actis said it made sense for Mengniu to tap into the dairy market in Shanghai by taking a stake in Bright.