Imagination Technologies share price surges on Canyon Bridge deal for Apple chip supplier

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Canyon Bridge is buying UK chipmaker Imagination Technologies (Source: Getty)

Shares in Imagination Technologies, a supplier of chips to Apple's iPhones (for now at least), are surging after a £550m takeover deal.

Stock was up more than 30 per cent as the market opened in London on Monday morning following the news that private equity firm Canyon Bridge is buying up the firm over the weekend.

Shares are trading at 172 pence per share at pixel time, thought that's still shy of the 182 pence per share offer made by China-backed Canyon Bridge, 

Read more: Imagination Technologies £550m sale to China-backed firm agreed

Analysts today indicated confidence that the deal would be approved, after Imagination said it would sell its stake in a US part of the firm MIPS. Canyon Bridge's proposed takeover of US firm Lattice Semiconductor was nixed by US authorities over security concerns linked with the private equity firm's Chinese backers.

On UK and European approval of the deal, Liberum's Janardan Menon said:

"While the UK and EU governments could oppose the deal, we believe it is unlikely given the state of the business, the thorough sale process that it has gone through where all options have been explored, and the lack of government objection to other recent sales such as Sepura to a Chinese entity. Canyon Bridge also plans to maintain the UK headquarters of the business."

Imagination was forced to put itself up for sale after Apple, its largest customer, said it would no longer use its technology.