Imagination raises offer for MIPS Imagination Technologies has increased its offer for US chip designer MIPS Technologies to $80m, raising the stakes in a bidding war against Nasdaq-listed semiconductor group CEVA. London-listed Imagination originally offered $60m for MIPS last month, prompting CEVA to swoop in with a cash bid of $75m. In a statement on Monday, Imagination said it had signed a revised agreement to acquire the operating business and certain patent properties of MIPS for $80m in cash. The UK group, whose graphics technology is in Apple's iPhone, wants to buy MIPS in order to challenge its domestic rival Arm in the competitive market for processor chip designs. Alex Jarvis, analyst at Peel Hunt, said she was confident that Imagination would ultimately win control of MIPS but that the final acquisition price could go much higher if CEVA returned to the fray. "Imagination has got greater firepower, a higher market cap and probably better access to debt [than CEVA], so you'd have to bet on Imagination winning it," Ms Jarvis said. It depends whether CEVA are daft enough to carry on a bidding war that they're going to lose, ultimately. Founded in 1998 and based in California, MIPS designs technology that is used in hardware such as digital televisions, WiFi routers and mobile communications products. Under the terms of the proposed deal, Imagination would acquire MIPS" operating business, 82 patents, and a licence for the remainder of its patents. In a simultaneous transaction, MIPS is selling its remaining 498 patents to a consortium led by Arm for $350m in cash. The Arm consortium will also receive a licence to use the 82 patents that Imagination is bidding for. The purchase represents an attempt by Arm and its partners to protect themselves against "patent trolls" - patent owners who enforce patents for profit, rather than to protect a product - and avoid legal battles with rivals over infringement. In its statement on Monday, Imagination said that in the year to June 30 2012 the MIPS processor licensing business generated about $60m in revenue and a loss before tax of $9m. Excluding cash and short term investments, MIPS" licensing business had gross assets of $20m at September 30 2012. Imagination said that if MIPS approved its bid, it still expected to complete the deal during the first quarter of 2013. Imagination is on Wednesday set to publish its results for the six months to October 31 2012. Shares in Imagination fell 2.1 per cent to 429.3p in London on Monday. In New York, shares in MIPS rose 1 per cent to $7.60 and CEVA was up 0.2 per cent at $15.12.