China-backed fund clear to buy Imagination after rival interest ends

LONDON, Sept 27 (Reuters) - Imagination Technologies (Other OTC: IGNMF - news) , the British chip designer selling itself to a China-backed buyout fund, said on Wednesday another potential buyer had ruled itself out, removing a potential hurdle to the 550 million pound ($737 million) deal.

The sale to Canyon Bridge Capital Partners, announced on Friday, is contingent on Imagination offloading its MIPS processor technology in a separate $65 million deal to Tallwood Venture Capital.

Imagination said the MIPS sale could now go ahead without a shareholder vote after the unnamed third-party was no longer involved in the wider sale process.

"Imagination has now received confirmation that the relevant party is no longer actively considering making an offer for Imagination," the company said.

"Accordingly, the sale of MIPS does not require shareholder approval."

Imagination put itself up for sale after Apple (NasdaqGS: AAPL - news) , its biggest customer, said it was developing its own graphics and video processing technology, sending shares in the British company down 70 percent.

($1 = 0.7464 pounds) (Reporting by Paul Sandle, editing by Louise Heavens)