Canyon Bridge's proposed takeover of USA firm Lattice Semiconductor was nixed by United States authorities over security concerns linked with the private equity firm's Chinese backers. That's 42 percent more than Imagination's closing share price on Friday.
Imagination said it had agreed to sell MIPS for $65 million to Tallwood Venture Capital, an investment firm with offices in Palo Alto, California, and Wuxi, southern China.
Canyon Bridge was keen to structure a bid to avoid scrutiny from USA regulators, Bloomberg reported earlier this month.
Canyon Bridge's plan to buy Imagination comes after its deal to acquire Portland, Oregon-based Lattice Semiconductor Corp. was rejected by President Donald Trump.
There's still a few barriers before the sale closes, but it's looking like we're not going to end up with Imagination just merging into an existing player or something.
In its update on formal sale process, the company said now that the sale process under the Takeover Code and the sale processes for MIPS and Ensigma businesses have now been concluded.
AJ Bell analyst Russ Mould said: "The deal is a very good outcome for Imagination's shareholders and provides certainty at a time when its future had been negatively impacted by Apple's decision". That triggered a stock slump of more than 50 percent. That sum is a premium of over 40 per cent, but rather less than the 268.75p per share the company was valued at before Apple's bombshell. Canyon Bridge's deal is conditional on the completion of the MIPS sale. Imagination acquired it in 2013 for $100 million. Established in 2016 with initial funding of 1.5 billion, the firm's financial backing can be traced back to China Reform Holdings Company, which one of its subsidiary funds describes as "a stated-owned assets management corporation under direct supervision from central government".
Shares in Imagination Technologies have jumped more than 40% after the United Kingdom chipmaker announced a takeover by a China-backed private equity firm that was blocked by Donald Trump from buying a U.S. rival over national security concerns.