Arm targets IPO valuation up to £43bn

British chip designer Arm is targeting a valuation of more than $50bn (£40bn) for its hotly anticipated IPO.

In a regulatory filing published on Tuesday, Arm estimates shares will be priced between $47 and $51. With 95,500,000 shares being offered that puts the valuation between $50bn and $52bn.

The company said it may issue compensation shares to employees, giving it a total valuation of up to £54.5bn (£43.4bn) on a fully diluted basis.

Parent company SoftBank will own approximately 90.6% of ordinary shares post-IPO, the filing stated.

Customers including AMD, Google and Nvidia have made non-binding commitments to anchor the IPO with a combined share purchase of $735m.

Reports in early August suggested Arm had been seeking a valuation in the $60bn to $70bn range.

SoftBank is seeking to raise nearly $5bn from the listing at a time when the investment firm has faced heavy losses from its portfolio.

Arm will list on the US Nasdaq later this month, despite the UK government lobbying for a London Stock Exchange IPO.

The Cambridge-headquartered company is considered the ‘jewel in the crown’ of UK tech. Arm’s chip designs are used by some of the biggest names in the semiconductor market, including Nvidia, Intel and AMD.

The company estimates that 70% of the world’s population uses products powered by its chips and that more than 30 billion chips based on its designs were shipped by the end of the 2023 financial year.

In 1998 Arm dual-listed on the London Stock Exchange and the Nasdaq. It was acquired by SoftBank in 2016 for £24.3bn.

Last year Nvidia attempted to acquire Arm for $40bn. However, the deal was called off over struggling to appease competition regulators.