The media reports that the Japanese corporation SoftBank Group is currently negotiating to purchase 25% of Arm shares, which are not its property, from Vision Fund 1 (VF1), an investment fund worth $100 billion.
Journalists reported on the negotiation process with reference to persons who are aware of it.
Arm is a factory-free company based in the UK. This firm specializes in the design of processors. The company is the developer and licensor of the architecture of 32- and 64-bit RISC processors, which are designed for use in portable and mobile devices, servers, and supercomputers.
The media reports that if the negotiation process ends with the conclusion of a deal on the purchase of shares, the fund’s investors, including the State Investment Fund of Saudi Arabia and Mubadala from Abu Dhabi, will receive an unexpected profit.
Arm plans to hold its first public offering of shares in September with a value of $60 billion to $70 billion. Several technology companies, including Amazon, Intel, and Nvidia, have held talks to participate in the IPO as anchor investors.
Raine Group advises SoftBank on the negotiation process. Founder and CEO of the corporation Masayoshi Son recused himself from the discussion of VF1 on this issue. He made this decision in order for the fund to act independently, based on the interests of investors. The relevant information was reported by the media with reference to insiders.
SoftBank currently owns 75% of Arm shares. The corporation acquired the British developer in 2016. The value of this transaction amounted to $32 billion. A year later, the corporation sold a 25% stake in Arm to VF1 for $8 billion.
VF1 demonstrated profitability in the second quarter of this year. This was largely due to the hype of investors around artificial intelligence, which contributed to the growth of the value of some startups in which the fund invested.
At the same time, the previous losses became an obstacle to the implementation of SoftBank’s attempts to gain external investors for Vision Fund 2 (VF2). The capital of this fund is $56 billion.
There is currently no exact data on the cost of Arm. The journalists tried to get this information, but their efforts did not lead to any results.
Media insiders reported that the probability of an agreement to purchase shares is not the maximum. If the deal does go through, SoftBank is likely to sell fewer Arm shares during the IPO and retain an 85% to 90% stake. This was reported by the media with reference to a person who is aware of some details of the negotiation process.
A potentially possible deal would be beneficial for SoftBank. Last week, the corporation reported its third consecutive quarterly loss.
SoftBank began preparing for the IPO of Arm after an unsuccessful attempt to conclude a deal to sell this brand to Nvidia for $ 40 billion. Last year, the corporation was unable to implement this intention due to objections from antitrust regulators in Europe and the United States.
Arm this year did not agree with the proposal of the British government to place shares on the stock exchange in London, saying that its goal is to pursue a flotation on the stock exchange in the United States.
As we have reported earlier, SoftBank Invests in AI Company Tractable.
