British chip designer Arm Holdings, whose semiconductors are found in over 90% of the world’s smartphones, has restated its US$70 billion initial public offering target when it returns to the public markets in New York later this year.
Arm’s parent company, the Japanese conglomerate SoftBank, reiterated the target in preparation for an investor roadshow reportedly due to start touring in September.
This would mark the largest-ever valuation for a British technology company, though a major hurdle stands in the way in the form of cornerstone IPO investor Nvidia Corporation.
SoftBank has approached Nvidia to become an anchor investor in Arm's float, but negotiations hit a hurdle as Nvidia was only willing to invest at a significantly lower valuation, around US$35 billion.
Nvidia had previously attempted to purchase Arm entirely for US$40 billion in 2021, but the deal was halted due to a national security investigation conducted by the UK.
From public to private and back again
Arm was valued at £24 billion (US$32 billion) when SoftBank took it private in 2016, which was around a 43% premium to its share price at the time.
If SoftBank gets the valuation is seeking, Arm’s market capitalisation would be a 129% increase on its take-private valuation.
Arm’s takeover by SoftBank was controversial.
Co-founder of ARM, Hermann Hauser, called it “a sad day for me and a sad day for technology in Britain” at the time.
"ARM is the last British (technology) company that has a global reach," he said. "It gave Britain real strength. It was a British company that determined the next-generation microprocessor architecture."
Likewise, the Cambridge-based group’s decision to float in New York instead of London has cast a shadow over the embattled London Stock Exchange.
British prime minister Rishi Sunak held talks with SoftBank in an effort to persuade the group to stay in London, but he proved not persuasive enough, given the higher valuations a twitch company can get across the pond.
Arm co-founder Jamie Urquhart rubbished the government’s long-term tech strategy when announcing the snub, stating that it “couldn’t be any worse than it is at the moment” in a Bloomberg interview.
“Even now we are waiting for the government to come out with a semiconductor strategy,” Urquhart said. “There’s very little here in the UK and on the things we are worried about, the Chinese already own them.”