Shanda Interactive Entertainment, the Nasdaq-listed Chinese online games company, on Tuesday announced the sale of more than a third of its stake in leading local internet portal Sina Corp to Citigroup Global Markets.

The sale highlights the contrasting fortunes of Sina and Shanda since the games company’s surprise purchase of a 19.5 per cent stake in the portal in early 2005, a move widely seen as a prelude to an unprecedented hostile takeover attempt.

The purchase prompted Sina to become the first Nasdaq-listed Chinese company to introduce a “poison pill” defence but the balance of relative power has since shifted as Shanda’s shares slid to less than half their February 2005 price.

Internet analysts said Shanda’s sale of 3.7m Sina shares for $99m marked the abandonment of any effort to win control of the portal, China’s leading supplier of online news and one of its biggest internet brands. The sale leaves Shanda with an 11.4 per cent stake.

Hou Tao, analyst at iResearch Consulting, said Sina’s hostility had meant that Shanda’s investment had “certainly not gone smoothly”, while the games company’s efforts to transform itself had “not been especially successful”.

Shanda on Tuesday declined to comment on its plans for the remainder of its stake, but cited a 2005 regulatory filing that said the shares had been bought “for strategic investment purposes”.

Under Chen Tianqiao, founder and chief executive, Shanda has sought to expand beyond the “massively multi-player online role-playing games” that made it a Nasdaq darling.

However, Shanda has made little impact with its attempt to become a supplier of home entertainment through products that aggregate content available on the internet.

Sina’s share price, while volatile, is at levels close to those it traded at when Shanda bought its stake, and investor confidence in the portal has risen recently.

Setbacks to Sina’s mobile telephone services, a big driver of its business in recent years, have been offset by strong growth in sales of advertising and net profits rose 18 per cent in the second quarter of this year.