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FTSE falls but Imagination soars on bid

FTSE falls but Imagination soars on bid

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.'

Imagination has been looking for a buyer sine June, after tech giant Apple (AAPL.O), its biggest customer, dealt the company a crippling blow by saying it would stop using the chip maker's products.

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.

Standard Chartered (STAN) fell 1.9% to 716.3p and Barclays (BARC) was down 1.2% at 189.3p.

Miners also dropped as copper prices fell. Anglo American (AAL) was down 1.2% at £13.17, Antofagasta (ANTO) fell 1.1% to 929.5p and Rio Tinto (RIO) was off 30p at £34.70.

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