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Intel licence deal lifts UK's Imagination

(Adds analyst, CEO quote, updates shares, background)

LONDON, July 24 (Reuters) - Shares in Britain's Imagination Technologies Group Plc rose by a fifth on Wednesday after the computer graphics firm announced a technology licence agreement with the world's number one chipmaker Intel Corp. (Nasdaq:INTC - News).

Imagination, which develops and licenses graphics, digital video, digital signal processing and audio technologies for the consumer entertainment and PC markets, said it would supply "PowerVR MBX" graphics and video technology for use in Intel's integrated circuits.

Shares in Imagination, which have lost more than a half of their value in the last three months, rose 21 percent to 29 pence by 1118 GMT, valuing the firm at around 50 million pounds ($78 million).

"Intel is seen as the best technology endorsement there is in the market," said analysts at independent research house Equityinvestigator.com.

"The company hopes that this important reference customer will help it to translate the high levels of interest it has seen for MBX into further licence deals," it said.

Under the terms of the agreement, Imagination receives licence and development income and will receive royalty revenues when Intel ships products incorporating the PowerVR MBX Core.

"We are delighted that Intel has chosen... our embedded graphics and video core, and believe that this is a major endorsement of our state-of-the-art technology in this area," said Imagination Chief Executive Hossein Yassaie.

Imagination announced in April that Japanese electronics giant Hitachi Ltd had signed a deal to use its 3D computer graphics technology in a range of products targeted at the entertainment, car navigation and mobile markets.


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