Arm Ltd. has decided against selling shares on the London Stock Exchange for now, dealing a blow to UK politicians who were lobbying the home-grown technology giant ahead of its initial public offering.
(Bloomberg) — Arm Ltd. has decided against selling shares on the London Stock Exchange for now, dealing a blow to UK politicians who were lobbying the home-grown technology giant ahead of its initial public offering.
The SoftBank Group Corp.-owned company will instead focus on a sole listing in New York for Arm later this year, people familiar with the matter said, asking not to be identified because the information isn’t public. The company is keeping its headquarters in Cambridge, England, for the time being and hasn’t ruled out the potential for a secondary listing in London down the road — but one is not likely, the people said.
Arm is a jewel of the UK tech industry. Its technology is found in most of the world’s smartphones and is pervasive across the electronics industry. Tokyo-based SoftBank’s $32 billion deal to buy the business in 2016 came with promises that it would create more UK jobs and leave the headquarters where it was. UK Prime Minister Rishi Sunak has been courting the company and its backer for a listing on the London Stock Exchange.
“There’s a great conversation actually going on in the UK markets at this point. And this is not about listing rules or listing regulations,” London Stock Exchange Group Plc Chief Executive Officer David Schwimmer said in an interview on Bloomberg TV on Thursday.
“There’s an opportunity to implement some of the reforms that the government is looking at, implement some of the reforms that the Capital Markets Industry taskforce is working on, that will continue to make London that much more of a competitive and attractive listing destination and financial center,” he said.
SoftBank and Sunak’s office declined to comment. The company was aiming last year for a valuation of at least $60 billion for Arm in an IPO, people familiar with the matter said at the time.
SoftBank is poised to appoint banks to lead the transaction as soon as this month, including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Barclays Plc, according to people familiar with the matter. It’s aiming to price the IPO at the end of the summer and then complete the offering later this year, the people said.
Masayoshi Son, SoftBank’s founder, has repeatedly said his primary focus is to take Arm public in the US because of its deep investor base and attractive valuations. He had considered a secondary listing in London after political appeals. Still, turmoil in the UK government, which went through three prime ministers last year, obstructed talks.
His decision to bypass Arm’s home exchange is raising questions among tech veterans about the government’s approach to tech companies and IPOs, which have historically lagged behind the US.
Companies have raised $2.7 billion via US initial public offerings this year, compared with $1.6 billion from listings on European exchanges, according to data compiled by Bloomberg.
“There’s been very little continuity, very little strategy,” said Jamie Urquhart, a tech adviser in Cambridge who was Arm’s former chief operating officer, in an interview on Bloomberg radio. “It doesn’t take that much to start looking forward and thinking about what you’re going to do, but you’ve got to do it.”
–With assistance from Dani Burger, Mark Cudmore, William Shaw, Emily Ashton, Giles Turner, Swetha Gopinath, Min Jeong Lee and Caroline Hepker.
(Updates with comments from LSEG, former Arm executive from fourth paragraph.)
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