A Kings Langley-based tech firm which was dropped by Apple has seen its shares soar after being bought by a Chinese investment firm.

Shares at Imagination Technologies, the chip designer best known for the Pure digital radio business, have rocketed by 35 per cent after being taken over by Canyon Bridge Capital Partners, which is based in America but funded by Chinese authorities.

The tie-up, announced on Friday, will see each shareholder receive 182p per share - a premium of around 42 per cent of the firm's share price on September 2.

The company was up more than a third at 174p in morning trading on the London Stock Exchange.

Shares in Imagination plummeted more than 60 per cent in April after it revealed that US tech giant Apple would no longer use its products, meaning it will no longer be eligible for royalty payments.

Imagination, which put itself up for sale in June, also revealed late last week that it had secured a separate deal to sell MIPS - its US micro-processing division - to Silicon Valley venture capital fund Tallwood for $65 million (£48 million).

Andrew Heath, Imagination chief executive, said on Friday that the outcome was "very good" for the firm's shareholders and the directors would unanimously recommend the tie-up.

He said the deal will ensure the company has "strong growth prospects" and will remain an independent IP licensing business based in the UK.

Imagination announced £2.4 million annual pre-tax profit in July, compared with a £29.4 million loss in 2016, while group revenue was up 19 per cent to £145.2 million.

AJ Bell analyst Russ Mould said: "The deal is a very good outcome for Imagination's shareholders and provides certainty at a time when its future had been negatively impacted by Apple's decision."

Canyon Bridge told the Telegraph it is eyeing more acquisition opportunities in the UK.

Liberum analyst Janardan Menon said: "We believe any US sensitivity regarding the sale of Imagination to a Chinese entity would be mainly concerning MIPS, rather than PowerVR or Ensigma.

"We therefore believe the sale of Imagination has a high chance of going through."