Imagination Technologies is up for sale after Apple dropped it as one of the chief suppliers for iPhone parts. The British chip designer says it has already received offers from a number of parties of which its investment bank Rothschild is currently assessing.
Imagination Technologies Woes
The British company has lost more than 70% in market value ever since Apple reiterated plans to end its supplies for iPhones. Early this year, the company put on sale three of its business units having become clear the iPhone maker won’t be using its chips in iPhones.
“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 of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders,” Imagination Technologies in a statement.
Apple has been Imagination Technologies biggest customer since the days of the iPod. Over the years, the British company has received royalty payments from the iPhone maker for every device that uses its designs. The revenue stream look set to dry up on the company lodging a dispute against the tech giant.
Imagination Technologies Possible Acquirers
Reports indicate that Tsinghua Unigroup could be in the running to acquire Imagination Technologies. The Chinese based company acquired a 3% stake in Imagination Technologies last year and raised $22 billion this year for acquisitions. Regulatory concerns have raised doubts about any deal happening given that the company boasts of the Chinese government as one of its investors.
Apple acquiring Imagination Technologies is also a possibility. Last year, there was talk that the iPhone maker considered acquiring the chip maker to produce iPhone chips internally. Ongoing standoff with Qualcomm which has over the years supplied chips for iPhone could reignite talk of the company acquiring the British company.
Intel is another chip giant that could take Imagination Technologies under its arm. Such an acquisition would strengthen the company’s portfolio allowing it to better compete against Qualcomm.
Apple stock was down by 0.16% in Thursday’s trading session to end the day at $145.63 a share.