The Arm IPO has kept everyone on tenterhooks with its will they, won’t they play. From investors to governments, the technology firm has attracted the attention of all and sundry ever since it announced its decision to go public. But the twist is, Arm found itself being wooed by two suitors who were on opposing sides of the North Atlantic Ocean. According to recent reports, the company has ultimately settled on one — more bankable, established suitor — and has kept the other on hold, temporarily.
In early February, rumors swirled of a possible double IPO on Nasdaq and the London Stock Exchange (LSE). The UK government was keen to enhance their exchange’s image as a welcoming place for tech stocks and had taken it upon themselves to convince the chipmaker to pursue a double IPO.
But SoftBank, Arm’s parent, has now confirmed that it will not list on the LSE and the chipmaker will make its public offering in New York this year.
ARM IPO to be Offered in New York
Arm is headquartered in Cambridge, England, and has not completely ruled out a London listing. Although it confirmed its New York plans, it is entirely possible that the company will offer an IPO at the LSE later.
The British Government had offered multiple incentives and promised to revise certain regulations in a bid to attract a London listing for the Arm IPO.
Early February, at a press briefing, Masayoshi Son, CEO of SoftBank had admitted, “The US … that’s the market that we are looking at when it comes to listing Arm, and most likely Nasdaq. But wherever it is, the U.S. is the market that we’re looking at for the listing of Arm.”
But then the UK government took it as a challenge and started aggressively pursuing the chipmaker. Arm, which has a global workforce of around 6,000, has a major presence in the UK, where nearly half its workers are based.
“After engagement with the British Government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that pursuing a US-only listing of Arm in 2023 is the best path forward for the company and its stakeholders,” Arm Chief Executive Officer Rene Haas said in a statement.
SoftBank is reportedly aiming for a valuation of anything between $30 billion to $70 billion and is poised to appoint banks to conduct the transaction. The current range puts the median value at $50 billion. Reportedly, SoftBank was pursuing a $60 billion Arm valuation last year.
Meanwhile, the UK is not losing heart and will be going ahead with reforms. A government spokesperson mentioned, “The UK is taking forward ambitious reforms to the rules governing its capital markets, building on our continued success as Europe’s leading hub for investment, and the second largest globally. We continue to attract some of the most innovative and largest companies in the world – and note Arm’s commitment to expanding its presence in the UK, providing a boost to growth, jobs and investment.” Arm was earlier listed in London, before being bought by SoftBank in 2016.
The tech company revealed plans to expand its operations in Britain and mentioned that it will open a new site in Bristol, England. In recent years, the chipmaker has moved beyond smartphones and forayed into data centers.
Most tech companies in the West have pushed back their IPOs as markets remain unstable. Although the chip sector has been down, investors are hopeful about Arm as it has branched out into the car industry and focused on diversifying its portfolio.
Arm has come a long way from its sale in 2016. From being rejected by Nvidia due to “regulatory challenges”, to being wooed by two of the biggest stock exchanges, the Arm IPO is expected to be one of the biggest in the semiconductor sector.
