News broke out over the weekend talking about the takeover of UK based chip maker Imagination Technologies by Palo Alto based company Canyon Bridge. Following the reports of this acquisition, Imagination Technologies’ shares leaped by 40%.
Canyon Bridge is funded by Chinese state backed capital firm, Yitai Capital. This deal is valued at £550 million at 182p per share. Imagination’s deal with Canyon Bridge doesn’t include the company’s American unit, MIPS, which is currently in the process of a sale to Tallwood Venture Capital for $65 million. Interestingly, the Canyon Bridge offer will only go through after the MIPS sale is completed.
Imagination Technologies was valued at £2 billion in 2012, but things haven’t been the same since then. The fact that Apple stopped taking orders for its GPU tech proved to be a major setback for Imagination and it immediately put itself up for sale following Apple’s announcement a few months ago.
The market, no doubt, has reacted positively to the news of the takeover as the leap in share prices suggest. As of early Monday, however, the price stayed fixed at 172p per share, which is below the offer price.
Canyon Bridge expects to increase research efforts in Imagination post the acquisition. As of now, the two companies have clarified that there won’t be any staff cuts. Canyon Bridge was recently blocked by the U.S. President Donald Trump and the committee on foreign investment from acquiring American chip maker Lattice Semiconductor in a deal estimated to be worth $1.3 billion.[Via The Guardian]