Imagination Technologies has seen its shares soar by nearly a fifth following a report Apple could be interested in buying the chip designer.
The company has jumped 36p to 221p as technology website Arstechnica said Apple was in “advanced talks” about acquiring Imagination.
Imagination’s PowerVR line of processors are used in Apple’s iPhone and iPod Touch, as well as the new products launched by the US group on Monday.
The UK company recently announced a restructuring, including a plan to sell its Pure radio business.
With Apple owning nearly 8.4% of Imagination, this is not the first time there has been speculation of a possible takeover, with the latest suggestions coming in January.
Broker Aviate said a deal would make strategic sense, allowing Apple to optimise the efficiency and power consumption of its devices, Reuters has reported.
Meanwhile Credit Suisse commented on the possible impact on the company of the new Apple iPhone SE:
While we see Apple launch as a positive for Imagination, we still model small decline in Imagination’s GPU units globally (475m in 2016 declining to 455m in 208) which is driven by continued share loss.. as Arm continues to penetrate into the high end with recent launches like Helio X20/X25 and P10/P20.
UPDATE:
Apple has now issued a statement saying it had held discussions with Imagination but did not plan to make an offer for the company “at this time.”
Imagination shares have, as a result, lost much of their gains and are now up 1% at 187p.
