“A Byzantine analysis would have Apple intent on taking over Imagination for PowerVR, and using the warning of cessation to depress its prey’s valuation (and emphasize its dependence on Apple) before pouncing. A version of this would see Apple standing by to acquire IMG’s IP (intellectual property) in any future crisis – perhaps at least providing a safety net to value,” Jefferies said in a note.
“This seems a long shot,” the research added.
Apple has yet to respond to a request for comment when contacted by CNBC.
Jefferies downgraded its outlook on Imagination’s stock from “buy” to “hold” and put a 95 pence price target on it, which represents a further fall from Monday’s close.
Apple is Imagination’s fourth-largest shareholder with a stake of just over 8 percent, according to regulatory filings, and the Cupertino-based titan certainly has enough cash to make an acquisition. Last year, Apple confirmed that it was in talks to acquire Imagination but did not make an offer, showing that it was interested.
Credit Suisse on Tuesday upgraded Imagination from “underperform” to “neutral” with a £1 price target, down from £1.80 on the prospect of an acquisition. The investment bank said it sees the likelihood of some interest in the company’s assets in graphics technology with the increased probability of mergers and acquisitions especially from China.
But the iPhone maker has also hired key players from Imagination and other chip companies as it strives to get a tighter hold on its supply chain, which could give it the expertise it needs to go it alone. Another theory behind the clash of the two companies is that it’s actually a bargaining tactic.
Jefferies said Apple could be playing the role of “bargaining bully” to get the lowest royalty rate it can.