Shares in Imagination Technologies (IMG) have soared after the embattled chip marker agreed to a £550 million takeover by buyout fund Canyon Bridge Capital.
Shares in Imagination jumped 27.9% on the news, but were still short of Canyon Bridge's 182p-per-share bid, changing hands at 166.2p.
The chip maker has also agreed to sell its Mips processor business to US-based Tallwood Venture Capital for $65 million (£48 million).
Liberum analyst Janardan Menon said the Mips deal had raised the likelihood of the China-funded Canyon Bridge bid proving successful.
'A sale of a US or European company to a Chinese-owned entity is becoming increasingly difficult as seen in president Trump's recent decision not to allow Canyon Bridge to acquire US-based Lattice Semiconductor,' he said.
'However, we believe Imagination has largely mitigated the risk of the US opposing the deal by agreeing to first sell Mips Technologies to US-based Tallwood VC, a Silicon Valley-based venture capital firm.'
The FTSE 100 meanwhile dipped in the morning's trading, dropping 20 points, or 0.3%, to 7,290, with banks weighing as investors cut back their exposure to risky assets.