After failed takeover talks with Apple, Imagination Technologies sells 3% stake to state-owned Chinese company

Apple had been in talks to potentially acquire Imagination, but the iPhone maker ultimately opted not to strike a deal. Following the breakdown in talks, Chinese state-owned company Tsinghua took a 3 percent stake in Imagination as of May 4.

Imagination Technologies has licensed high-performance graphics processor unit (GPU) designs, known as PowerVR graphics series, for use in Apple's A-series dating back to the original iPhone in 2007. Apple licenses the PowerVR series of GPUs and combines them with memory, logic and ARM-based CPU parts on to a single chip called a SoC or system-on-a-chip.

Though Apple and Imagination have worked together closely, a slowdown in smartphone sales has affected the company, prompting layoffs and restructuring earlier this year. By April, Apple was in talks to purchase Imagination, though the deal fell through.

In a rare move, Apple issued a statement admitting it had "some discussions" with Imagination, but that it did not "plan to make an offer for the company at this time." Apple already owns an 8.5 percent stake in the company, more than twice that of Tsinghua's new share.

Tsinghua's purchase translates to 8,370,032 total shares with 3 percent voting rights assigned. The Chinese state-owned company now has a share of Imagination almost equivalent to Intel's 5 percent.

As of December 2015, Imagination Technologies only had five primary investors: Baillie Gifford & Co., M&G Investment Management Ltd., Apple Inc., Newton Investment Management Ltd. and Majedie Asset Management Ltd.