Chinese-backed Canyon Bridge Capital Partners has hired advisers as it prepares to swoop on chipmaker Imagine Technologies.
Advisers from Citi will be working on the offer, according to Sky News, and the fund has reportedly made some significant steps forward in its bid to clinch the technology business.
It is thought that a formal bid may be put forward by Canyon Bridge in the next two weeks, but Imagination Technologies is in talks with other parties.
Imagination Technologies said in June that it had lost its supply contract with Apple, and was therefore putting itself up for sale. The firm remains in conflict with Apple, and said last month that it had made "no progress" resolving the dispute. Shares in the British firm are down by more than 40 per cent on last year.
While taking offers for the whole company, Imagination Technologies has also expressed an interest in offloading two of its divisions, MIPS and Ensigma.
However, any move from the Chinese-backed fund its likely to come under intense scrutiny from the Conservative party, which has vowed to take a tough stance on foreign takeovers.
In its manifesto before, the Conservative party said:
We will require bidders to be clear about their intentions from the outset of the bid process; that all promises and undertakings made in the course of takeover bids can be legally enforced afterwards; and the government can require a bid to be paused to allow greater scrutiny.