STOCKS NEWS EUROPE-Imagination up as Apple takes stake

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08:35GMT 18Dec2008-Imagination rises as Apple takes stake

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Shares in Imagination Technologies (IMG.L) rise 26 percent to 49 pence as iPhone-maker Apple Inc (AAPL.O) takes a stake of 3.6 percent in the chip designer by subscribing to 8.2 million new shares at 39 pence each, the mid-market close price on Wednesday.

Teathers analyst Dan Ridsdale says the move is clearly a positive endorsement of Imagination's intellectual property, although it was widely known that Apple was a licensee already.

"(It) gives us further confidence that IMG's royalty per share from Apple devices should increase as it launches devices on its own chips," Ridsdale says in a note.

"(But it's) very unlikely to lead to a takeover in our view, given IMG's broad licensee base and Intel's investment."

Seymour Pierce also initiates on the stock, with a "buy" recommendation and price target of 53 pence, saying the company had the potential to replicate the success of ARM (ARM.L), albeit in a smaller way.

For company statement click on [ID:nRnsR3667K]

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