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BEIJING, March 25 (TMTPOST) — Global investment company SoftBank Group is seeking a valuation of US$60 billion for British chip-making company Arm for its IPO.
After failing to sell Arm to Nvidia, SoftBank plans to get Arm to the stock market. Sources familiar with the matter said that SoftBank hopes to get a valuation of US$60 billion for Arm, a target that surpasses the US$40 billion it would have received from the deal with Nvidia.
SoftBank plans to hire Goldman Sachs Group, JPMorgan Chase and Mizuho Financial Group to lead a loan transaction for Arm before the IPO, sources said. The three financial institutions might also be the underwriters of the IPO in the future. Sources said that the underwriter list has not yet been finalized and that there might be other investment banks getting involved as well.
SoftBank bought Arm at US$32 billion in 2016 but later decided to sell the company out. Valuing Arm at more than US$60 billion is a gamble for SoftBank Chief Executive Officer Masayoshi So, according to Bloomberg.
SoftBank tried to sell Arm to Nvidia but the deal was aborted due to anti-trust scrutiny from regulators in many countries. The valuation target of US$60 billion means that SoftBank would need to convince financial institutions involved in Arm’s IPO that the chip-making company is more valuable than its semiconductor peers in the industry.
Sources said that the valuation of Arm is still uncertain and will be affected by multiple factors, such as the market conditions.
The share price of semiconductor companies has been rising during the global pandemic, which is driven by the demand for electronic devices generated by the need to work or study from home. The demand might decrease as countries curb the pandemic spread.
SoftBank, Goldman Sachs Group, JPMorgan Chase and Mizuho Financial Group have not commented on the news report.
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