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Arm retail offering likely planned as IPO in US

UK INVESTOR FOCUS:
A retail offerings specialist suggested moving to the UK government as investors “earn access to Poor’s IPO”.

As UK government hopes of listing domestic chip giant Arm Ltd.

Even if Arm chooses the US for an initial public offering (IPO), the UK public could buy shares in the chip designer through a retail bid, according to PrimaryBid Ltd, a firm that specializes in such offerings.

PrimaryBid has pitched the idea to government ministers, having previously organized a similar arrangement alongside the US listing of luxury memberships club owner Soho House Ltd in 2021.

Photo: AFP

“Retail investors in the UK want and deserve access to Arm’s IPO,” said Anand Sambasivan, Chief Executive Officer of PrimaryBid. “A listing in London would be ideal, but there is no reason why the UK public should not.”

Arm and the UK Treasury declined to comment.

A Softbank Group Corp representative did not respond to a request for comment.

Arm-owner Softbank — which is also PrimaryBid’s largest shareholder — intends to bring the unit back to market and was targeting a valuation of at least $60 billion in March last year.

Arm is central to the chip industry because its processor designs power about 95 percent of mobile devices, according to the company’s website.

British Prime Minister Rishi Sunak, who spoke with Arm CEO Rene Haas and Softbank founder Masayoshi Son last month, has pushed for Arm’s listing in London and the US, the Financial Times reported.

That effort has focused on arguing for a dual initial listing – a boost to the City of London’s post-Brexit ambitions.

That would give Arm exposure to London Stock Exchange indexes and increase the liquidity of its shares, but Son has said his focus is on getting Arm listed in the US given it’s large investor base and attractive valuations.

The process has been delayed due to uncertainty in global markets.

The PrimaryBid proposal could leave the UK with the consolation price of a retail bid alongside a US listing. It could also help spur a government push to channel people’s savings into tech companies, with the aim of boosting their returns and supporting growth sectors.

A full listing of Arm in the UK would be a “big coup,” said Steven Fine, chief executive officer of London brokerage Peel Hunt.

Whatever the final plan, “we also believe there will be significant retail demand,” he said.

PrimaryBid estimates there could be £3 billion (US$3.7 billion) of demand from mainstream investors for Arm, which had a sizeable following among retail investors when it was previously listed in the UK.

Even if PrimaryBid’s pitch goes through, there is still work to be done to restore the UK’s international reputation as open for post-Brexit business, said former President of the Confederation of British Industry Paul Drechsler.

“Everyone used to want to come in, from students to old people,” he said. “Where are we now?”

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