Chipmaker Imagination Bought by China-Backed Tech Firm

Shares in Imagination Technologies have jumped more than 40% after the UK chipmaker announced a takeover by a China-backed private equity firm that was blocked by Donald Trump from buying a US rival over national security concerns.

Imagination has agreed to a 182p-a-share takeover by Canyon Bridge, which is based in Palo Alto in California and backed by state-owned Chinese fund Yitai Capital. The deal values the Hertfordshire-based company at [$739 million]; at its peak in 2012, Imagination had a stock market value of nearly [$2.6 billion].

Shares in Imagination surged to 172p in early trading on Monday, but remained below the offer price.

A fortnight ago, Trump blocked Canyon Bridge's $1.3bn attempt to buy the US chipmaker Lattice Semiconductor. Canyon Bridge was founded with capital from the Chinese government and has indirect links to Beijing's space programme. It manages about $1.5bn on behalf of Yitai Capital.

Imagination, which designs the graphics processors used in smartphones and other electronic devices, put itself up for sale in June after Apple, its biggest customer and one of its main shareholders, said it would stop using its graphics technology in the iPhone and other new products by 2019.

Just over half of Imagination?EU?s 1,200 workforce are based in the UK, with the rest working in Europe, the US, China and India. Its head office and main research and development centre are in Kings Langley near London. The business is run by Andrew Heath, a former Rolls-Royce executive.

Imagination said it had talked to a number of potential purchasers, adding that there may be another takeover offer from an second unnamed bidder.

The deal agreed with Canyon Bridge excludes Imagination?EU?s US unit MIPS, which is being sold to Tallwood Venture Capital, a Palo Alto-based investment group, for $65m. Canyon Bridge?EU?s deal is conditional on the completion of the MIPS...

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