Imagination Jumps As China's Tsingua Unigroup Takes 3% Stake

By Rory Gallivan

LONDON--Shares in Imagination Technologies Group PLC (IMG.LN) soared Monday after it revealed China's Tsingua Unigroup International has taken a 3% stake in the semiconductor designer.

The stake was revealed in a regulatory filing by Imagination Technologies on Monday.

Tsingua is a state-owned firm tasked with advancing China's semiconductor ambitions. Last year it announced investments totaling more than $20 billion, including a stake in U.S. disk-drive maker Western Digital Corp. (WDC).

Imagination Technologies declined to comment. Tsinghua didn't immediately respond to a request for comment.

News of Tsingua's stake in Imagination comes two months after Apple Inc. said it had held talks about a possible bid for Imagination, but added it doesn't currently plan to make an offer. Apple has an 8.48% stake in Imagination, according to Imagination's latest annual report.

Imagination already has a relationship with Tsingua through Spreadtrum, a Chinese semiconductor designer that licenses Imagination's technology. Spreadtrum was bought by Tsingua in 2013.

The Tsingua stake in Imagination is only worth about 15 million pounds ($21.6 million), but provides further evidence of high-level interest in the U.K. company, which has previously counted U.S. semicondictor giant Intel Corp. (INTC) as a significant shareholder.

Imagination's share price has been battered by a series of warnings as it suffers from a slowdown in demand for smartphones and other products made by Apple and other customers, as well as competition from bigger rivals including U.K. peer ARM Holdings PLC (ARM.LN). In February it announced the resignation of its long-standing Chief Executive Hossein Yassaie and said it will implement a full review of its operations.

Shares at 1213 GMT were up 20 pence, or 13%, at 171 pence valuing the company at GBP473 million.

(Eva Dou and Robert McMillan contributed to this article.)

-Write to Rory Gallivan at [e-mail]; Twitter: @RoryGallivan

(END) Dow Jones Newswires

May 09, 2016 08:57 ET (12:57 GMT)

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