Imagination Technologies shares were up on the close as a China-backed fund closes in on its takeover offer

 
Lucy White
SINGAPORE-TECHNOLOGY-APPLE-LIFESTYLE
Imagination's shares plummeted earlier this year after it lost a contract to supply Apple (Source: Getty)

London-listed Imagination Technologies ended today with its share price up almost six per cent on the previous close, beating down short sellers’ hopes of a crash.

The electronic chip maker’s shares shot up in morning trading to highs of 134.5p, following weekend reports from Sky News that China-backed fund Canyon Bridge Capital Partners was closing in on a takeover. The price settled at 126p on the close.

Imagination put itself up for sale in June after losing a contract to supply Apple, its biggest customer, in April. Its share price plummeted by more than 60 per cent following the loss, causing hedge funds Algert Global and GSA Capital Partners and asset managers Lombard Odier and Numeric Investors to increase their short positions in expectation of a flop.

Read more: Imagination Technologies Group (IMG) share price crashes as it gears up for a battle with Apple after US tech giant says it no longer needs British firm's intellectual property

But the short sellers look set for disappointment. Sources reportedly said that “significant progress” had been made in talks between Canyon Bridge and Imagination, and a formal bid could be tabled in the next fortnight.

Any offer from the fund, which was revealed last year to be part-funded by the Chinese government, would place pressure on UK Prime Minister Theresa May.

May has vowed to crack down on foreign takeovers which might not benefit the UK economy, and the Conservative party’s manifesto stated:

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.

Read more: Queen's Speech for business: Brexit talks "intensify", foreign takeover rules on, executive pay out

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