Imagination Tech Now Up for Sale, as Apple Dumps its Graphic Chip Design

Imagination Technology, a Britain-based company, announced on Thursday that it had put itself up for sale. The U.K graphic chip designer has lost 70% of its value in April, after its largest customer, Apple, announced that it would cut its relationship with the company.

Imagination, which was founded in1985 and listed in 1994, has been shaken by Apple’s announcement that it was developing its own graphics chips and that it will stop using Imagination’s intellectual property in new products. Though Apple gave Imagination 15 to 24 months of advance noticed, which the time frame that Apple anticipated it would take to transition to its own internally developed graphics architecture. However, the silicon manufacturer said that it doubts Apple can go ahead with its plan without violating its patents, which led to it starting a dispute resolution procedure with Apple in May.

Historically speaking, Apple used Imagination’s Technology and intellectual property for years. Imagination formed the basis of Graphics Processor Units in Apple’s iPhones, Tablets, iPods, TVs and watches and Apple actually accounts for about half of the British firm’s revenue.

The British firm said that it has received interest from a number of potential buyers to acquire the company. As such, it is starting the formal sale process for the whole company. Buyers are not required to publicly identify themselves and can negotiate potential offers privately. The company warned the investors that it’s quite possible no firm offers will go out of the process.

“Over the last few weeks, we have received interest from a number of parties for potential acquisition of the whole group. The board has decided to initiate a formal sale process and is engaged in preliminary discussions with potential bidders,” Imagination said in a statement on Thursday.

The firm did not mention any of those potential bidders, but some analysts spilled that Intel Corp., Qualcomm Inc., MediaTek Inc., CEVA, several Chinese companies and possibly even Apple itself could all be interested.

In the wake of the sale announcement to 149.5 pence, Imagination’s stock jumped back up by 21%, giving the company a market capitalization of 425 million pounds ($538 million).

In the meantime, Imagination is continuing their efforts to sell two businesses, its embedded MIPS processor technology and mobile connectivity division Ensigma, in an effort to raise cash, and they have already received proposals for both businesses.

“That was a pretty die scenario, akin to selling off the family silver to keep the estate going a little longer,” an analyst said. “Now the shutters are up and a buyer sought. A pretty ignominious end to what was a great British tech success story.”

The group also confirmed that its dispute with Apple was still ongoing.

In spite of losing Apple as a customer, the Mac maker had already been poaching key executives and engineers from Imagination for months, so Imagination has been losing talent as well. Apple holds a minority 9.5% stake in Imagination, and in early 2016, Apple and Imagination reportedly had dialogues about a potential full-on acquisition, but Apple decided not to make an offer.

Meanwhile, last week, Apple offered a $1 billion bond for financing clean energy and environmental projects, representing the first corporate green bond offered since Trump made his move.

Apple Inc. traded traded 0.16%, or 0.24, to $145.63, by 4:14 AM GMT-4. It opened in $145.77, with a session high of $146.70, and a session low of $145.12. Its market capitalization was $763.79 billion, its P/E ratio was 17.03, and its dividend yield was 1.73%.

Imagination Technology Group Inc. traded  12.17%, or 17.50, to GBX 161.25, by 10:37  AM GMT+1. It opened in GBX 144.75, with a session high of GBX 162, and a session low of GBX 144. Its market capitalization was GBX 441.28 million.

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