UK chip developer Imagination Technologies has announced that it is up for sale and in talks with potential buyers.
Shares in the tech firm were up 20 percent this morning, which is particularly good for the company considering its position two months ago.
In April, Imagination’s biggest customer Apple announced it would no longer be using its chips in its iPhone and Apple Watch products. This caused the company’s share price to drop around 70 percent, down to 78.50, in part because around 35 percent of its revenues come from Apple, which also owns an eight percent stake in Imagination.
Investors at Imagination were told that Apple will stop using its intellectual property within two years as it is developing its own chip technology to power its devices. This wasn’t great news for other UK-based chip firms either, such as ARM Holdings and Laird who are also big Apple suppliers.
However, it appears that Imagination is moving on and up after its Apple drama. This morning it announced that it has received interest from different companies and so had begun a formal sale process. It said it is now in preliminary talks with potential buyers.
The company’s share price was reached highs of 148.0 this morning, almost double its lowest price in April.
Despite this jump, and the sign of confidence, it is thought that overall it will be difficult for Imagination to recover fully from the loss of its major customer.
After the initial shock, it announced it was selling its MIPS and Ensigma operations, which focus on embedded processors and connectivity.
In the statement, the company said the sale for these elements of the business was “progressing well and indicative proposals had been received for both businesses.”
But it demonstrates how the UK tech darling has been struggling. Neil Wilson, senior market analysts at ETX Capital, said that this attempt to strengthen the balance sheet “clearly wasn’t enough”.
“That was a pretty dire scenario, akin to selling off the family silver to keep the estate going a little longer,” he said.
Imagination reported that it is still in disputes with the Silicon Valley giant at the moment.