UK government still trying to get Arm to IPO in London
Would give its right, er, leg, to keep HQ – and jobs – in Britain
The UK government is continuing efforts to have chip designer and licensor Arm listed on the London Stock Exchange after its public offering rather than New York, as is the current plan.
At stake is whether Arm moves its headquarters to the US, potentially leading to the further loss of UK jobs.
Speaking to the Financial Times, UK minister for Technology and the Digital Economy Chris Philp said the government was still "working closely with" Arm management on the IPO process, despite its parent SoftBank having previously indicated that it was planning to list Arm on the Nasdaq stock exchange in New York.
Philp was speaking at the launch of the UK's new Digital Strategy, which is intended to promote the four-nation state as a good place to start and run a digital technology business, and aims to boost the economy by pushing measures to improve companies' access to finance and enhancing the nation's digital skills and talent.
The minister noted that many companies have launched with a dual listing in both the UK and US, saying that plenty of big successful companies use this model. "But we also obviously want to promote the UK as an exclusive venue for listing."
The Register asked Arm and SoftBank for their views on the matter, but SoftBank declined to confirm whether it had been in talks with the UK government over the IPO, and Arm declined to comment.
Location, location, location
The place where Arm is listed after its public offering may seem a mere academic concern, but it would be a blow to the UK tech sector, and could even see the chip designer transfer its headquarters the US, at least those are fears from insiders at Arm's Cambridge base.
Arm is reportedly cutting one in ten jobs in the UK organization, equating to around 350 roles. Worldwide, Arm is planning to expunge about 1,000 positions.
A senior source close to the company told us last month that more layoffs at the company HQ in Cambridge are likely if the IPO happens in the US.
"If Arm lists on the Nasdaq or the Dow Jones there is a requirement to move the HQ to the USA," the source told us. "If it lists on the FTSE100 at its current valuation it would be the ninth biggest company listed. The rumor is Arm is too big for a London stock exchange listing."
The IPO for Arm was planned to value the chip company at up to $60 billion – close to the figure that Nvidia was expected to pay for it if the transfer from SoftBank had gone ahead. The two companies cancelled the move in February, citing significant challenges with the amount of scrutiny the deal was coming under from various regulatory bodies.
However, reports in April suggested that SoftBank had changed tack and was said to be planning to keep a controlling stake in Arm, selling off a smaller portion of the business than originally planned so that it can retain a controlling interest over the company.
- SoftBank aims to keep control of Arm after IPO – report
- SK Hynix may head up consortium to buy Arm
- Arm's $66bn sale to Nvidia is off: Deal collapses after world's competition regulators raise concerns
- Goldman Sachs reportedly set to head up $60bn Arm IPO
The number of tech businesses that have expressed an interest in taking a stake in Arm continues to grow. The latest was chipmaker Qualcomm, which said it would like to create a consortium that would keep Arm neutral, or at least out of the hands of any individual chip company.
Earlier this year, the co-CEO of Korean chipmaker SK hynix told a meeting of the company's shareholders that it was considering forming a consortium to buy Arm, while Intel CEO Pat Gelsinger said at the company's Investor Day in San Francisco that he would be interested in participating in any buying group that emerges to take ownership of Arm.
SoftBank has previously stated that it aims to complete the Arm IPO within its fiscal year ending March 31, 2023. ®