Canyon Bridge Is Said to Ready Imagination Bid Minus U.S. UnitBy , , and
Chinese-backed firm wants to avoid U.S. regulatory scrutiny
Imagination began sale after announcing loss of Apple business
China-backed private equity firm Canyon Bridge Capital Partners is close to making an offer for Britain’s Imagination Technologies Group Plc that would exclude the troubled chip-maker’s U.S. business, according to people familiar with the discussions.
Canyon Bridge, which says it’s based in Silicon Valley with an office in Beijing, is keen to structure a bid to avoid scrutiny from U.S. regulators, said the people, who asked not to be identified because the matter is private. The company’s $1.3 billion purchase of Portland, Oregon-based Lattice Semiconductor Corp., whose programmable logic chips are used in military communications, is being opposed by U.S. national security officials, and President Donald Trump is considering whether to block the deal.
Imagination has drawn preliminary interest from several parties, the people said. SoftBank Group Corp.’s ARM Holdings Plc and chip designer Rambus Inc. are among those looking at the company and considering bids, the people said. Some potential bidders may only be interested in parts and could decide against bidding, they said.
Representatives of Canyon Bridge, Imagination, ARM and Rambus declined to comment.
“We’re exploring all sorts of different kinds of M&A right now,” Rambus Chief Financial Officer Rahul Mathur said during an earnings call in May. Rambus, based in Sunnyvale, California was also working with a financial adviser to evaluate its own sale options, people familiar with the matter said in July.
A sale of Imagination would be a test for the British government, which has pledged to tighten the rules that govern takeovers by foreign companies. Canyon Bridge would attempt to gain informal approval from the U.K. by making commitments to bolster Imagination’s local workforce, a person familiar with the matter said.
Imagination said in June that it was initiating a formal sale process. The company initiated the sale after announcing that Apple Inc., which accounts for more than half of its sales, would no longer use its graphics technology. Imagination’s shares have dropped more than 45 percent this year.
Sky reported last month that Canyon Bridge hired Citigroup Inc. to work on formal bid.
Apple owned 8.1 percent of Imagination as of June 28, according to data compiled by Bloomberg.
Before putting the entire company on the market, Imagination said in May that it would sell its WiFi tech business Ensigma and its MIPS unit, which it acquired in 2013 for $100 million. Clients for the company’s MIPS products, which are used in network infrastructure, include Qualcomm Inc., MediaTek Inc., Broadcom Ltd. and Cavium Inc.
— With assistance by Ian King