UPDATE 1-Imagination Tech increases offer for MIPS

LONDON Dec 10 (Reuters) - British microprocessing firm Imagination Technologies has increased its offer to acquire the operating business of MIPS Technologies to $80 million after a rival firm topped its bid.

Mobile chip designer CEVA made a $75 million bid for MIPS in November, outweighing Imagination's $60 million original offer in November.

Imagination said on Monday it had signed a higher revised agreement in response.

Imagination, which is looking to buy the MIPS business to gain patents and step up its challenge to an increasingly dominant ARM Holdings, said that it still expects the transaction to complete in the first three months of 2013.

It said that all other material terms and conditions of the acquisition remain as stated in the original announcement on 6 November, which means it will seek to acquire the operating business, some patent properties and licence rights to other patents.

U.S.-listed MIPS' technology is in blu-ray players, digital televisions and video games consoles such as the Sony PlayStation 2.

Imagination said in its original announcement that it anticipates the acquisition to add to earnings in the 2014 fiscal year.