imagination technologies

Apple confirms it considered buying Imagination Technologies, no plans to buy now

Next Story

Google rebrands its Chromecast app to Google Cast to reflect expansion to more devices, including speakers

Earlier today a report was published by Ars Technica claiming that Apple was in advanced discussions to acquire UK chip technology company Imagination Technologies. Today, Imagination issued a statement from Apple, which is both a customer and a shareholder in Imagination, confirming that there were discussions, but there is no plan to make an offer to buy it at this time. 

From time to time, Apple talks with companies about potential acquisitions. We had some discussions with Imagination, but we do not plan to make an offer for the company at this time.

Imagination’s share price shot up by nearly 20% today on the news as both companies kept mum.

It’s pretty rare for Apple to comment on acquisitions — let alone discussions that didn’t result in an acquisition — but as Imagination is a public company in the UK, and the speculation was market-moving, Imagination had to issue a statement.

(Furthermore, if Apple does decide to make a bid for Imagination after all, it won’t be for six months from now unless there are other material circumstances, such as another offer for the company; or Imagination’s finances take a dive from the guidance the company has given previously.

This is specified in the second part of the announcement posted by the company on behalf of Apple: “This announcement is made in accordance with Rule 2.8 of the Code. As a result of this announcement, Apple will, except with the consent of the UK Panel on Takeovers and Mergers, be bound by the restrictions contained in Rule 2.8 of the Code.”)

Apple, as of Imagination’s last quarterly report, held an 8.48% stake in Imagination Technologies. 

Last week, Imagination Technologies confirmed layoffs, bringing the total to 350 for the year as it looks to cut some $22 million from its operating costs by 2017. The company supplies chipset technology to Apple, specifically around graphics components for the iPhone and Imagination’s PowerVR technology, along with other handset makers.

But demand for those devices has declined amid a wider slowdown in smartphone sales, and Imagination has been feeling the pinch in some of its less profitable business areas, so it has announced that it will close some of these down, and it is also looking for a buyer for its consumer electronics division, Pure.

The company also confirmed, however, that this would not impact its three main business areas — graphics and multimedia (Imagination’s PowerVR business), processing (its MIPS processor business that it acquired in 2012) and connectivity (its Ensigma low-power communications IP business).