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UK rumor has Apple eyeing takeover of ARM

Ken Ray

Say hello to the rumor du jour: Apple is considering a bid for ARM Holdings. The Web site for the London Evening Standard says that investors across the pond seem to like the Apple/ARM idea; so much so that shares of the chip designer jumped from by 8 pence to just over £2.51 by midday, a 3.2% gain. [Share prices corrected –Ed.]

It's hard to tell where, exactly, the rumor came from. According to the paper, "the takeover speculation was fueled by stellar second-quarter figures from Apple (on Tuesday) smashing Wall Street's forecasts," though there was nothing about such a buy mentioned on Apple's earnings call.

Still, Apple is ARM's biggest customer, and traders in the UK seem to think the idea is a good one. The price would be pretty steep for an Apple acquisition, though. Traders mentioned in the piece say that ARM could fetch more than £5.2 billion, or roughly US$8 billion. While Apple's got the cash, its recent purchases have cost much less, such as the Quattro Wireless buy in January for around $275 million, and the 2008 purchase of P.A. Semi for a rumored $278 million.

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