Arm IPO: SoftBank’s UK chip designer listing timing and details in full
By Jenny McCall
09:49, 11 August 2022
Japanese conglomerate and tech investing company Softbank Group (SFTBY) announced in February that it plans to list the semiconductor company it owns, Arm Ltd. Reports claim that SoftBank (SFTBY) is seeking a listing for Arm because the private investors within the company’s venture capital fund, Vision Fund, own 25% of Arm and are looking to cash in through an initial public offering (IPO).
SoftBank CEO Masayoshi Son indicated that the initial public offering (IPO) would take place in the US, and it would most likely be listed on the Nasdaq (US100), which is also the home for other tech stocks, such as Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN).
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Softbank Group (SFTBY) share price chart
London or New York?
However, according to a report in the Financial Times, the UK government is discussing whether Arm should be listed in London.
As a result, SoftBank (SFTBY) said it was considering listing some of its stake in the chipmaker on the London Stock Exchange (LSE).
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown wrote in a note: “The British company is set to go public once again, but if, as rumoured, Arm reaches for a listing in New York, it may be seen as a vote of no-confidence for London, where newly listed ‘tech’ companies have had a distinctly rocky ride over the past year.”
Streeter stresses that London has been working hard to position itself as a Fintech hub, as the UK continues to grapple with its post-Brexit status, in an era when it has struggled to attract fast-growing companies to launch an IPO. The government has begun to make changes to try and make the city more attractive to founder-led firms, but it seems these alone aren’t cutting it, with other disappointments popping up.
With that said, reports in July claim that the Arm IPO, which is not expected to take place until 2023, is now on hold, as SoftBank grapple with the political uncertainty in the UK caused by the resignation of Prime Minister Boris Johnson.
The halt on the Arm IPO follows the setback in February, which saw technology group, NVIDIA (NVDA) announce the termination of its $40bn (£32bn) acquisition of Arm LTD.
NVIDIA (NVDA) share price chart
A NVIDIA (NVDA) statement read: “Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come,” said Jensen Huang, founder and chief executive officer of NVIDIA. “Arm is at the center of the important dynamics in computing.”
‘’The collapse of the blockbuster Arm deal was a bitter blow of disappointment for SoftBank (SFTBY). If it had sold Arm as rumoured, it would have marked a reversal in the dismal fortunes elsewhere in the portfolio where valuations have been hurt hard,” Streeter said.
“It had the rare hallmarks of a SoftBank investment turning to gold, but instead, Arm will head back for listing in financial markets where tech stocks have been seriously tarnished of late, and such a bumper valuation is likely to be far from reach. Given the number of obstacles strewn in the path of SoftBank in its attempts to strike the deal, news that it has called it off comes as little surprise.”
Was Arm ever a listed company?
Yes, Arm was previously a dual-listed company in London and New York, but it was purchased by SoftBank (SFTBY) in 2016 and was subsequently delisted.
When will Arm be listed again?
SoftBank (SFTBY) boss, Son has said that Arm would become a publicly traded company by the end of its current financial year, which is to the end of March 2023
What does Arm do?
ARM Holdings has often been described as the UK's leading technology company. It is an intellectual property (IP) provider, responsible for designing the architecture used in chips. Despite it not being a household name, its technology is a necessity in many products, such as TVs, smart cars, drones, and mobile phones.
What valuation has Arm been given?
Reports in Bloomberg claim that SoftBank (SFTBY) is seeking a valuation of at least $60bn.
Is NVIDIA (NVDA) still buying Arm?
No. The deal was terminated in June following concerns from global regulators, such as the UK’s Competition and Markets Authority (CMA), as well as the European Commission Vice President Margrethe Vestager, who argued that the acquisition of Aem by NVIDIA (NVDA) could lead to restricted access to ARM’s IP.
The US Federal Trade Commission (FTC), also waded in on the acquisition and vowed to stop the merger in order to prevent a chip conglomerate from stifling the innovation pipeline.
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