Shares in Acorn Group Plc climbed 11.5% on Friday on reports that it will soon be the subject of a bid from Risc chip designer Arm Holdings Plc. Acorn is saddled with around 130 million Arm shares which would be the subject of huge capital gains payments if they are sold. If Arm took over Acorn, the shares could be cancelled – increasing the value of the remaining shares. Acorn, moreover, has evolved into a company focused on multimedia and digital TV. It moved into the hardware area again after poaching a key design team from ST Microelectronics to be the core of a new system on a chip center the company plans to base in Bristol, UK. In another move away from its traditional base, Acorn has sold its 50% interest in educational IT supplier Xemplar Education Ltd to its partner Apple Computer for 3m pounds. While Arm now claims that its microprocessor cores will power 70% of all digital mobile phones this year, buying Acorn would help it build up a base in a set-top box market which is set for equally buoyant growth.
