To is paying $3.3m (HK$26m) to acquire two Milkyway Image subsidiaries - Milkyway Image Hong Kong and Luminous Star - and will exit the company with his own production staff and projects.
The listed entity will change its name to Brilliant Arts Multimedia Holdings and continue producing films through two other subsidiaries - Inspire Film Distribution and Point of View Movie Production - both of which are headed by Law.
The split is subject to independent shareholder approval at an extraordinary general meeting. Trading of shares was suspended on April 24 and resumed May 4.
Recent Milkyway Image productions include action thriller Triangle, directed by To, Tsui Hark and Ringo Lam, Law's youth romance Love At First Note, Yau Nai Hoi's Eye In The Sky, and suspense action film The Detective (working title), starring Lau Ching Wan, which is co-directed by To and Wai Ka-fai.