Apple Inc. revealed that it was in the initial stages of takeover talks with the Imagination Technologies Group but eventually decided not to make an offer for the supplier of its graphics cards. Imagination, which has a market cap of over $732 million, spiked on Tuesday after Ars Technica reported the talks with Apple.

Apple Inc. Was In Talks To Acquire Chip Maker Imagination

Not buying its graphics cards supplier

Imagination’s shares have rebounded lately from their low hit on Jan. 20 after analysts at N+1 Singer noted that the company’s unique intellectual property rights could make it a potential takeover target. Apple already owns an over 8% stake in the graphics cards maker.

In a regulatory statement, the iPhone maker said, “We had some discussions with Imagination, but we do not plan to make an offer for the company at this time.”

As per the rules of the U.K. Takeover Panel, companies in takeover talks with a British target must release a statement on them. If the prospective bidder does not plan to make an offer, it is blocked from making a new offer within six months without special dispensation, says Bloomberg.

How Imagination would have helped Apple

According to Bloomberg Intelligence analyst Anand Srinivasan, Apple could have used Imagination’s graphics processor technology to boost its virtual reality chances. In January, Apple CEO Tim Cook described it as having “some interesting applications.”

In 2008, Apple bought PA Semi, which designs fabless chips. The acquisition helped the iPhone maker design its own CPU cores for its A-series SoCs, which was first seen in the iPhone 5. Similarly, acquiring Imagination would have helped the tech giant move GPU design in-house. Though Apple already works closely with Imagination for the PowerVR GPUs, acquiring Imagination would certainly give it more control.

Imagination has been going through a rough phase lately. In February, Hossein Yassaie, who had been CEO of the company since 1999, stepped down after the company guided for a full-year loss amid slowing sales of the iPhone. Also a few days ago, the supplier decided to lower its head count by 200 jobs in addition to the 150 cuts revealed last month.

On Tuesday, Apple shares closed up 0.76% at $106.72. Year to date, the stock is almost flat, while in the last year, it is down by over 15%.