According to sources familiar with the matter, SoftBank Group Corp. plans to hold a majority share in Arm Ltd. following the scheduled initial public offering of the semiconductor company, selling a lower amount than initially intended.
After a deal to sell Arm to Nvidia fell through earlier this year, SoftBank decided to go public with the company it bought in 2016.
According to one of the sources who requested not to be identified because the proposal isn’t yet public, SoftBank has determined that selling a smaller share of Arm now, given the present collapse in chip stocks, will allow it to receive a greater valuation for the balance later.
A possible 2023 date
According to the sources, SoftBank’s $8 billion term loan, guaranteed by Arm shares, has given it the financial flexibility to keep a larger stake in the firm and wait for improved market conditions. According to them, the IPO will most likely take place in Q1 of 2023, although the amount and timing of the offering may change.
Arm sells and licenses semiconductor-related technology used in anything from cellphones to supercomputers.
The ubiquity of its devices has made its proposed IPO in the $550 billion semiconductor sector a closely watched event.
A valuation greater than the failed Nvidia offer
According to Bloomberg, SoftBank would like a valuation of at least $60 billion for Arm. It’s hoping for a greater price than it would have received if it had sold the chip creator to Nvidia, which it failed to do.
SoftBank has lined up 11 lenders for the $8 billion term loan secured by Arm shares, including JPMorgan Chase & Co., Barclays Plc, Banco Santander SA, BNP Paribas SA, Credit Agricole Corporate and Investment Bank, and Goldman Sachs Group Inc.
Masayoshi Son, the company’s CEO, bought Arm for roughly $32 billion and utilized the money to hire many people to break into new areas like server chips for data centers.