Blocked in U.S. by Trump, private equity firm turns to U.K.

Canyon Bridge Capital has agreed to acquire British chip design company Imagination Technologies for £550 million, or £182 per share. Not only does that represent nearly a 42% premium on Thursday's closing price, but also a big boomerang for both buyer and seller:

• Buy-side: Canyon Bridge is the China-backed private equity firm that was just blocked by the Trump Administration from buying Lattice Semiconductor, due to national security concerns. That experience is probably why the deal will not include Imagination's U.S. embedded processor subsidiary, which instead will be sold to Tallwood Venture Capital in a separate transaction.
• Sell-side: Imagination generated around 40% of its revenue by selling graphics processing units to Apple for use in iPhones. But when Apple announced in April that it would develop its own GPUs, Imagination stock fell by more than 60%.
• More pricing context: Canyon Bridge is paying a 77% premium to that April low point, but 33% less than where Imagination shares were trading just prior to the Apple announcement.