Imagination Technologies Group PLC (LON:IMG) jumped on Monday amid talk that a Chinese tech fund may bid for it – potentially sparking a takeover tussle.
The stock rose 18.6p, or 12.3%, to 169.61p on news that Tsinghua Unigroup International Co. Ltd had bought a 3% stake in the firm.
State-backed Tsinghua has spent more than US$9.4bn in the last couple of years on acquisitions and investments in a bid to make itself the world's third largest chipmaker, according to analysts.
Tsinghua, worth US$30bn, has already acquired Spreadtrum Communications, Inc, RDA and HP's networking business, the analysts said.
It tried to buy US giant Micron Technology Inc (NASDAQ:MU) for US$23bn last August but reportedly was rejected on national security grounds.
The interest follows speculation that Apple Inc (NASDAQ:AAPL) was interested in buying Imagination.
The iPhone maker said in March that it had had talks with the graphics chip developer, but had decided not to make an offer at that time.
Analysts at Liberum Capital say the Chinese interest could shake Apple into action as the US group may not welcome a Chinese rival.
They said in a note: “We don't know whether Tsinghua is looking to stay as a minority shareholder or to acquire the business outright.
“Tsinghua's stake could ignite a sale process as we believe Apple is unlikely to want Imagination's technology to go to China.”
Meanwhile, stocks extended their gains as traders brushed off downbeat Chinese trade data.
The FTSE 100 Index advanced about 36 points to 6161 by lunchtime while the AIM 100 Index put on 14 points to 3389 and the FTSE AIM All-Share was 2.1 points up at nearly 725.
Could Strategic Minerals PLC (LON:SML) be preparing to unveil more news about its nickel-sulphide-copper Hanns Camp scheme in Western Australia?
Certainly, the shares have risen ahead of recent announcements and they were up nearly 40% again on Monday, to 0.46p.
They increased nearly 39% before and after news on April 21 that the group had applied for a work permit for Hanns Camp.
Then the stock rose another 39.6% between May 4 and May 5 before the company said on Friday that authorities had granted the permit and initial drilling plans were complete.
Elsewhere, Botswana Diamonds (LON:BOD) sparkled 23% to 2.38p as it said a drilling programme would start soon on its PL186 licence on the Maibwe block in the southern African country.
Iodine producer Iofina (LON:IOF) unveiled record iodine production, making it the second largest producer of iodine in North America. Shares extended early gains to stand nearly 31% up at 15.25p.
But Opera Investments (LON:OPRA) retreated more than a quarter to 7.25p after saying it had terminated an agreement to buy SoloPower Systems Holdings, Inc.
In the top flight, miners subsided after China's exports and imports fell more than expected in April.
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Stocks large and small shrugged off downbeat Chinese trade data to edge ahead in early Monday trading.
The FTSE 100 Index advanced about 12 points to 6137 while the AIM 100 Index put on eight points to 3383 and the FTSE AIM All-Share was 1.24 points up at 724.
The big miners were on the slide after China's exports and imports fell more than expected in April.
Chinese authorities said on Sunday that exports fell 1.8% during the month while April imports dropped 10.9% from a year earlier.
That was the 18th month in a row of falling imports, which economists said indicated domestic demand remains weak.
Rio Tinto PLC (LON:RIO) was off more than 4% at 2040p, Anglo American PLC (LON:AAL) subsided 5.6% to 612.8p and BHP Billiton PLC (LON:BLT) lost 2.8% to 821.1p.
But some smaller resource stocks got a boost from their own news announcements.
Iodine producer Iofina (LON:IOF) unveiled record iodine production, making it the second largest producer of iodine in North America.
Revenues fell year-on-year but operational efficiencies helped it to rack up positive earnings in 2015 despite iodine prices. Shares jumped nearly 11% to 15.25p.
Regency Mines was also making progress, up 6.25% at 0.42p, after doing a deal with a private US oil and gas company to bid in an auction under a Chapter 7 bankruptcy proceeding for a 75% non-operating working stake in an existing well in oil-rich Wyoming. Regency will get a net revenue interest of 60%.
Elsewhere, mobile payments company Bango plc (LON:BGO) lifted nearly 18% to 56.5 on news that it was buying US carrier billing service BilltoMobile, adding $80mln (£55mln) annual US-based end-user spend to the Bango payment platform.
Allergy Therapeutics plc (LON:AGY) was 2.4% healthier at 24.25p as it revealed positive top-line results from the PQBirch204 Phase II study for birch-induced seasonal allergic rhinitis.