Broker snap: Bid spec overblown at Imagination

Shares in chip designer Imagination Technologies have fallen back despite iPhone maker Apple lifting its stake in the company to 9.5%,.Apple bought 11.5m shares in Imagination in the market, lifting its stake to 19.7m shares, and also subscribed for 2.2m new shares at 142.75p. The stake build-up follows a move by chip designer Intel which last week upped its stake in Imagination to 16%.Analyst Ian Robertson at Seymour Pierce is not convinced that having Apple or Intel as major shareholders in the company is without drawbacks."Too high a stake by Apple or Intel could well cause some existing or potential licensees to think twice about having Imagination's technologies at the core of their roadmaps. We understand that management has already received concerned phone calls from existing licensees," Robertson states.Robertson categorises Intel and Apple as investors, not buyers, and does not expect either party to raise its stake above 20% in the medium term and "would be very surprised indeed if they were to attempt to buy Imagination," though either company could buy Imagination from its small change."We remind investors that Intel has a long history of taking and holding significant stakes in companies that it has seen as important to its further success - notably Micron and RAMBUS where its investment was not necessarily a guarantee of success for these companies," the broker concludes.