By Ed Ballard
LONDON--Shares in U.K. semiconducter company Imagination
Technologies PLC (IMG.LN) slumped Friday after the investment arm
of Intel Corp. (INTC), previously the top shareholder, sold a 9.3%
stake.
"Intel Corporation continues to have a business relationship
with the company, having licensed several generations of
Imagination Technologies' graphics and video processing cores,"
Intel Capital said in a regulatory filing, adding that the two
companies "continue to discuss opportunities to work together."
Intel Capital raised 51.3 million pounds ($87.4 million) through
the sale of 25 million shares at 205 pence conducted by Credit
Suisse, Jefferies International Ltd. and J.P. Morgan. Intel will
keep 13.4 million shares, a 5% stake.
Shares were down 7.2% at 1023 GMT in London, the most of any
FTSE-250 company, having earlier dropped as much as 10%. The stock
was boosted earlier this week when the Hertfordshire, England-based
company reported strong growth in licensing deals. Shares are up
19% for the year to date.
Hopes for the company were boosted in February when Apple Inc.
(AAPL) extended a deal to license Imagination's graphics and video
intellectual property. Apple is among Imagination's top
shareholders with an 8.6% stake according to FactSet.
Intel Capital's sale, which was disclosed late Thursday, came on
the same day as a downgrade from analysts at Barclays, who said
enthusiasm over the company's long-term prospects masks a weaker
outlook for near-term sales.
"Our main area of concern is the inconsistency between a
conservative near-term outlook and the level of optimism built into
long-term targets," analysts wrote, saying they "struggle to
justify" a higher value than 190 pence per share. Barclays advised
investors to reduce their holding in the stock.
Shares traded down 16 pence at 209 pence at 1023 GMT.
Write to Ed Ballard at ed.ballard@wsj.com; Twitter:
@edmballard
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