Softbank, the owner of the former FTSE 100 technology star Arm, is exploring a float of the microchip designer in New York, in a move that would underscore the London Stock Exchange’s failure to attract and retain technology companies.
The Japanese conglomerate is considering listing Arm, which is based in Cambridge, on the Nasdaq exchange, according to market sources, where tech firms typically attract higher valuations and more patient investors.
SoftBank took the company private in a blockbuster buy-out in 2016 for £24bn, depriving London of its standout success in the technology sector and signalling the start of a global investment spree. Arm dominates the global market for smartphone chip designs and is now making inroads into the market for servers and laptops, with its silicon designs favoured for their power efficiency.
A string of UK-listed technology companies have since been snapped up by foreign buyers, including the security software provider Sophos and Imagination Technologies, another microchip designer.
SoftBank has publicly stated its aim to relist Arm in 2023, but it has never specified a venue. Plans are said to be developing as the Japanese conglomerate attempts a swift recovery from a $13bn annual loss, triggered by wayward bets on unproven technology businesses such as WeWork, which collapsed from a valuation of $47bn to just $2bn after a botched float.
Arm, which has been able to invest more of its profits in growth as a private company, could return to the public markets as soon as late next year, sources said.
One SoftBank shareholder said the process to list Arm “could be accelerated to allow them to move on the asset sale” programme, which has already seen the firm offload multibillion dollar stakes in its telecoms unit and holding in T-Mobile US in less than two months.