Ailing Brit chip designer Imagination Technologies up for sale
Clash with tech titan continues
Trouble struck British chip designer Imagination Technologies has confirmed it is for sale amid an ongoing dispute with Apple that has crushed its valuation on the London Stock Exchange.
The firm’s share price went into freefall on 3 April after it revealed that Apple, which accounts for circa half of its sales, was to stop using the PowerVR GPU IP in roughly two years' time. The stock fell to 84p from 268.75p in a day.
As a result of the conflict, the MIPS processor design and Ensigma connectivity wings were actively marketed for sale, but the chip designer has opened up on fresh talks.
“Imagination Technologies announces that over the last few weeks it has received interest from a number of parties for a potential acquisition of the whole group.
“The board has therefore decided to initiate a formal sales process for the group and in engaged in preliminary discussions with potential bidders,” the chip designer told the LSE.
Potential bidders yet to come to the fore were invited to contact Rothschild, which is already handling existing discussions over the sale of MIPS and Ensigma that are “progressing well” with “indicative proposals” received.
A formal dispute resolution process between Apple and Imagination began in May. “Imagination remains in dispute with Apple,” Imagination told the stock market today.
The firm has contended at the time that it "would be extremely challenging to design a brand new GPU architecture from basics without infringing [Imagination's] intellectual property rights". The firm had offered Apple cheaper terms for its licensing and royalties, but this was evidently rebuffed.
Apple deciding to work on a separate, independent graphics design was a huge blow to Imagination but its strife isn’t new; the Brit biz reported it biggest ever losses a year ago of £63.2m.
At the half way stage of the current financial year, for the six months ended 31 October, Imagination posted sales of £64.4m, up from £60.7m but losses narrowed to £5.49m versus £13.5m in the prior year period. ®