Imagination Technologies Group PLC (LON:IMG) shares gained today following a report that Chinese-backed fund Canyon Bridge Capital Partners is close to making a formal bid for the struggling chipmaker.
Canyon Bridge is said to have hired Citigroup as an advisor on the potential deal and is expected to make a formal offer in the next two weeks, Sky News reported at the weekend, citing sources.
The fund, ultimately funded by entities connected to the Chinese government, has made significant progress during talks with Imagination in recent weeks, the sources said.
READ: Imagination Technologies put up for sale in wake of Apple Inc dispute
However, negotiations are still ongoing and an offer is not guaranteed.
House broker Liberum acknowledged the reports in a note to investors today, repeating a ‘buy’ rating and target price of 193p on the stock.
In late afternoon trading, Imagination Technologies shares were 3.5%, or 4.25p higher at 126.5p, albeit below the session peak of 135.0p.
A bid would test Prime Minister Theresa May’s vow to subject foreign takeovers of British companies to closer scrutiny.
The Conservatives’ general election manifesto said: "We will require bidders to be clear about their intentions from the outset of the bid process; that all promises and undertakings made in the course of takeover bids can be legally enforced afterwards; and the government can require a bid to be paused to allow greater scrutiny.”
READ: Imagination Technologies returns to profit as sale talks continue, but no progress in dispute with Apple
Imagination Technologies put itself up for sale in June following the loss of its contract to supply Apple with graphics technology for iPhones and iPads.
Since then the British company has been in dispute with Apple on claims the iPhone maker has not presented evidence to show that it will no longer require its technology without violating patents, intellectual property and confidential information.
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