Apple considering ARM acquisition?

“Talk of mega-takeover bids for a pair of FTSE 100 companies had investors excited today,” Rosamund Urwin reports for The Evening Standard. “The City’s gossips were pushing two tales: that Apple is considering a bid for ARM Holdings and that Vale could make an offer for Xstrata.”

“Of the two yarns, most investors seemed to think an approach was more likely for ARM, the Cambridge-based technology company which was recently promoted to the top flight,” Urwin reports. “The chipmaker’s shares shot up 8.1p to 251.1p, topping the Footsie winners’ list, as more than five million shares changed hands by midday.”

“Apple is ARM’s biggest customer and speculation is that the iPad maker wants to take chip design in house,” Urwin reports. “‘A deal would make a lot of sense for Apple,’ said one trader. ‘That way, they could stop ARM’s technology from ending up in everyone else’s computers and gadgets.’ Traders reckon a bid would come in at around 400p a share, valuing ARM at more than £5.2 billion.”

Urwin reports, “The takeover speculation was fuelled by stellar second-quarter figures from Apple last night smashing Wall Street’s forecasts. This was good news for ARM even without a bid, because ARM pockets royalties from the sale of iPads.”

Full article here.

MacDailyNews Note: ARM was founded (as Advanced RISC Machines Ltd) as a joint venture between Acorn Computers, Apple Computer and VLSI Technology in 1990. Today, ARM processors are used in almost all modern mobile phones, handheld gaming devices, portable media players, GPS, and many other devices. ARM Holdings (ARMH) currently has a market cap of US$1.9 billion. Debt-free Apple currently has $41.7 billion in cash and short term investments on-hand.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]