Truss seeks to convince SoftBank to list Arm in London

SoftBank would prefer to list Arm in New York, where tech firm valuations tend to be much higher

Prime Minister Liz Truss' government is planning a new approach to convince Japan's SoftBank Group Corp to list Cambridge chip designer Arm on the London Stock Exchange.

As covered by the Financial Times, Liz Truss and Kwasi Kwarteng will push to conduct high-level talks with SoftBank this week, following the end of the official period of mourning for Queen Elizabeth II.

SoftBank executives have discussed the prospect of a dual listing with British officials, but are apparently still more interested in a single listing in New York.

SoftBank has made no secret of its preference to list in New York, where tech firm valuations tend to be the highest in the world.

CEO Masayoshi Son named the Nasdaq stock exchange earlier this year, when discussing SoftBank's intent to take Arm public after a $40 billion (£34 billion) buyout offer by Nvidia fell through.

However, executives at Softbank were also talking to UK officials about the possibility of a rare dual listing, which would enable the firm to have bases in New York as well as London.

Son told shareholders in June that he supported a US listing since the majority of Arm's customers are based there. Since then, the UK Government and top London Stock Exchange executives have continued to lobby SoftBank.

Former investment minister Gerry Grimstone was in charge of previous lobbying efforts. However, negotiations between the Government and SoftBank ceased in the summer after Boris Johnson resigned from his post. Grimstone also left the Government after Johnson's departure.

Chris Philp, the former digital minister who also part of the previous efforts, is now working with Kwarteng as chief secretary to the Treasury Department.

A source with knowledge of the matter told the FT the UK Government views the opportunity to gain at least some of Arm's flotation as a "big and quick win," to show it is serious about the City of London's future.

However, officials have warned that time is running short. SoftBank will need to decide in the next two months if it intends to stick to the plan to float Arm, potentially as soon as the first quarter of next year.

A source close to SoftBank executives says they anticipate a fresh effort by UK officials to persuade them of the benefits of listing in London.

Arm reported record revenues for its first financial quarter (ending in June) last month, making it one of the bright spots for SoftBank Group, which reported an unprecedented $23.5 billion loss for the same period.

Arm reported record first-quarter fiscal 2022 revenue of $719 million, up 6% from the prior quarter.

Arm rival Nvidia had been in talks to acquire the company, but talks fell through in February this year. Nvidia blamed 'significant regulatory challenges preventing the consummation of the transaction'.

Nvidia is an Arm licensee, so the proposed deal had prompted fears that it could give itself preferential treatment. Other licensees were concerned the acquisition could impact Arm's position as a neutral supplier.