- Approach follows Imagination profit warning, CEO departure
- Apple may have used chip company to improve VR offering
Apple Inc. said it held preliminary takeover talks with Imagination Technologies Group Plc, but opted against making an offer for the supplier of its graphics cards.
“We had some discussions with Imagination, but we do not plan to make an offer for the company at this time,” Apple said in a regulatory statement.
Imagination has had a turbulent year. Hossein Yassaie, who had been chief executive officer since 1999, stepped down in February after the company forecast a full-year loss amid slowing iPhone sales. Last week it announced a further 200 job cuts, adding to the 150 revealed last month.
The stock has recovered from a Jan. 20 low after analysts at N+1 Singer speculated that Imagination’s unique intellectual property rights could attract potential bidders. The company, which is already more than 8 percent owned by Apple, had a market value of 508.7 million pounds ($732.4 million) as of Monday’s close, before the Tuesday spike in its shares when Ars Technica blog reported the talks with Apple.
Apple might have used Imagination’s capabilities in graphics processors to help its virtual reality offering, according to Bloomberg Intelligence analyst Anand Srinivasan. Apple CEO Tim Cook described the field in January as having “some interesting applications.”
The U.K. Takeover Panel requires companies reported to be in takeover talks with a British target to issue a statement clarifying the situation. If the prospective bidder says it doesn’t plan to make an offer, it’s then forbidden from making a new bid within six months without special dispensation.