Sunak and SoftBank revive discussions for UK Arm IPO
Discussions are "very constructive"
Prime Minister Rishi Sunak has reopened discussions with Japan's SoftBank Group for listing chip designer Arm on the London Stock Exchange.
According to the Financial Times, Sunak met with Arm CEO Rene Haas last month in Downing Street to explore a London listing for the company.
People with knowledge of the matter told the publication Masayoshi Son, SoftBank's founder, took part via video conference. Spencer Collins, Arm's chief legal officer, was also present.
Two persons briefed on the matter described the discussion as "very constructive," while another called it "positive." The UK's City minister, Andrew Griffith, is also participating in discussions, according to the report.
The sources said SoftBank is now likely to wait until later to float Arm in an IPO, in the hopes that market circumstances will improve. The pressure to float Arm early this year has lessened, they added.
In the past SoftBank has indicated that it intends to list Arm in New York, the city with the highest tech firm valuations worldwide.
CEO Masayoshi Son said in November that Arm would be the only firm on which he would focus going forward, calling it "the source of my energy, the source of my happiness and the source of my excitement."
When describing SoftBank's intention to take Arm public after a $40 billion (£34 billion) takeover deal from Nvidia fell through last year, Son mentioned the Nasdaq stock market for an Arm listing.
He said in a June shareholder letter that he was in favour of a US listing since the bulk of Arm's clients are based there.
The UK Government and senior London Stock Exchange executives then began efforts to persuade SoftBank to list in London, but talks stopped once Boris Johnson resigned from his post.
Because a dual listing would be more expensive and complicated, it is expected that government officials would have a difficult time convincing SoftBank to agree to it.
One person involved in last year's lobbying said, "the best possible scenario (for London) would be to list common equity in both markets at the same time, tapping into pools of liquidity in both."
Arm was founded in Cambridge and listed on the London Stock Exchange before SoftBank bought the company shortly after the 2016 Brexit vote.
If it actually returns to the London Stock Exchange, it will be seen as a huge vote of confidence in the UK market.
Arm reported record revenues for its first financial quarter (ending in June 2022), up 6% year-on-year, making it one of the bright spots for SoftBank Group, which reported a group-wide $23.5 billion loss for the same period.