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Goldman Sachs reportedly set to head up $60bn Arm IPO

Owner SoftBank pursues valuation higher for the chip designer than Nvidia's initial offer

Goldman Sachs is reportedly lined up to be the lead underwriter for Arm's public offering in a move expected to value the chip designer at up to $60bn, higher than the purchase price first offered by Nvidia.

Owner SoftBank is said to be favoring Goldman Sachs to head up the Arm flotation, according to Reuters, which cited loquacious anonymous sources. Bloomberg also named JPMorgan Chase & Co. and Mizuho Financial Group as firms that SoftBank was locked in discussions with.

Goldman Sachs was originally hired by SoftBank in 2020 to explore the company's options around an IPO or a sale of the business, which led to the initial $40bn offer from Nvidia.

The Register asked Arm, however, it declined. We also contacted SoftBank and Goldman Sachs for confirmation, but neither were immediately available to provide a response.

SoftBank's decision to take Arm public again comes in the wake of Nvidia's collapsed acquisition bid in February. This followed months of "siginficant regulatory challenges" from the US Federal Trade Commission, the European Commission, China's antitrust authority and the UK government. The sale was opposed by many tech firms, who feared that a merger might stifle competition by giving Nvidia the power to limit access to Arm's chip designs.

Nvidia's original $40bn offer for Arm soared closer to an estimated $66bn just before the deal's collapse. This is because the buy price was a mix of cash and shares, and the latter have gone up 420 percent since the start of 2020.

This hasn't been lost on SoftBank, with the firm now said to be pursuing a valuation of at least $60bn for Arm's IPO. SoftBank founder and CEO Masayoshi Son told investor last month: "we will aim for the biggest IPO ever in semiconductor history" at an event last month.

Meanwhile, trouble could be brewing for Arm back in the UK following reports that the company was preparing to ax about 15 percent of its staff, with new CEO Rene Haas recently warning employees of a need to "stay competitive" and "to be more disciplined about our costs and where we're investing."

The reports have led to the Unite union calling on Arm's management to put on hold any redundancy process and "open up the books" for closer inspection to reveal the company's "true" financial health, as The Register recently reported.

Arm does not appear to be in bad shape, financially. For the nine months ended December 31, 2021 [PDF] Arm reported net revenue of $2.045bn, up 40 percent year-on-year and pre-tax profit of $260,000 versus a loss of $203,019 a year earlier.

SoftBank has previously stated that it hopes to complete the Arm public offering within the fiscal year ending March 31, 2023. ®

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