Imagination Tech lands MIPS with $100 million offer
By Paul Sandle
LONDON (Reuters) - British chip designer Imagination Technologies on Monday beat Ceva Inc in the race to buy processing technology firm MIPS with a knockout offer of $100 million.
Imagination and its U.S. rival have been battling to buy the operating business of MIPS, a pioneer of 32-bit and 64-bit processing, since last month when a $60 million agreed deal from the British company triggered a bidding war.
Mobile chip designer Ceva, which had twice outbid Imagination, said while there was merit in buying MIPS, raising its offer again would not meet its financial objectives.
MIPS' technology is in blu-ray players, digital televisions and video games consoles such as the Sony PlayStation 2.
Imagination, whose graphics and video technology is used in Apple's iPhone, wants to buy MIPS to strengthen its hand against the likes of ARM Holdings in CPUs, the central processors in devices like routers, modems and games consoles.
Shares in Imagination were trading 3.2 percent lower at 396.3 pence by 9:01 a.m. ET, underperforming a 0.3 percent lower midcap index.
Analysts at Liberum Capital said that with net cash of $78 million, Imagination would have to borrow about $22 million for its higher offer.
"While no one likes a leveraged tech company, Imagination is a cash generative business," the broker said. Continued...