ARM In Talks With Potential IPO Investors – Report

SoftBank’s British chip designer, ARM Holdings, is reportedly in talks with a number of blue chip firms over possible investments in its upcoming initial public offering (IPO).

According to the Reuters report, citing two sources familiar with the matter, ARM is in talks with some of its biggest customers and end users about bringing on one or more ‘anchor investors’ in the IPO.

ARM in early May registered for a US public listing with the US Securities and Exchange Commission – in a move paves the way for one of the largest initial public offerings (IPOs) of the year.

Anchor investors

The registration had rebuffed the charm offensive from a number of British Prime Ministers to get the firm to consider a dual listing in both the US and UK.

Now according to the Reuters report, ARM is talking to at least ten companies, including Intel, Alphabet, Apple, Microsoft, TSMC, and Samsung Electronics, about their potential participation in the IPO, one of the sources said.

The talks are said to be preliminary and any decision about an anchor investment in ASM’s IPO won’t come till August, the source added.

The investment would not come with any board seat or control, according to the source.

ARM plans to sell its shares on Nasdaq later this year, seeking to raise $8 billion-$10 billion, Reuters reported earlier in April.

SoftBank is reportedly seeking a valuation for ARM at anywhere between $30 billion and $70 billion.

That said, SoftBank intends to retain a controlling stake in ARM after the IPO, whoever takes a stake in the chip designer.

ARM and Intel declined a Reuters request for comment.

Nvidia sale

The decision to seek an IPO came after ARM’s $40bn sale to GPU powerhouse Nvidia was called off in February 2022, due to “significant regulatory challenges”.

The UK government had led that global challenge to the deal, and indicated it would block it on national security grounds.

Soon after the Nvidia deal fell through, Masayoshi Son in February 2022 indicated that the US Nasdaq would be the most likely listing destination for ARM.

The head of Japan’s SoftBank then reiterated this stance in June 2022.

Dual listed

ARM was formed in 1990 when it was spun out of Acorn Computers, and its chip designs are used in 95 percent of smartphones due to their low power consumption.

This makes ARM a major force in the semiconductor market, and it licensing its designs to some of the world’s largest consumer tech manufacturers including Qualcomm and Apple.

Japan’s SoftBank had acquired ARM for $32bn in 2016.

Before that, ARM was actually dual-listed in London and New York until the 2016 SoftBank acquisition – an acquisition the UK government at the time welcomed, despite concern at ARM falling into the hands of a foreign entity.