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Hermann Hauser: London ‘too small’ for Arm IPO, calls for dual listing

Image credit: MZinchenko / Shutterstock

The co-founder of the company that created Arm has said London is “too small” for the semiconductor firm’s IPO and said a co-listing with New York is the “natural solution”.

Hermann Hauser, co-founder of Acorn computers, which later span out chip designer Arm, said that “there isn’t the liquidity for technology stocks in London”.

Speaking to BBC Radio 4’s Today programme, Hauser said: “The problem with London is it’s really too small for a company of the size of Arm to do it alone.”

Arm, which designs and licences processor intellectual property used in many of the world’s smartphones and computers, has been exploring public listing options since the collapse of its $40bn merger with US tech giant Nvidia.

Arm parent company SoftBank has indicated that the US is the preferred destination for the Cambridge-founded company to re-enter the public market.

“Arm is a UK company. It worked well with a dual listing before and I’m very much in favour of having a dual listed in London again,” Hauser added.

A spokesperson for Arm declined to comment.

However, Russ Shaw, founder of Tech London Advocates and Global Tech Advocates, said the UK should fight to ensure Arm lists in the UK.

“This is not just about image and reputation – this decision holds significant national, strategic importance with respect to the importance of the semiconductor industry globally,” Shaw told UKTN.

Shaw added that Arm could encourage future tech unicorns to float in the UK public market.

PM lobbies for UK Arm IPO

Earlier this week UK Prime Minister Boris Johnson reportedly wrote to SoftBank executives in a last-ditch bid to persuade the Japanese conglomerate to list semiconductor designer Arm in London instead of New York.

However, some analysts have said it would be in Arm’s best interest to choose the US over the UK.

“This move reeks of political opportunism,” said David Bicknell, principal analyst, thematic intelligence team, GlobalData. “The UK government only has its own interests in mind—not Arm’s future.”

Bicknell added: “The [London Stock Exchange’s] desire to persuade Softbank that Arm should list in London is understandable, but the chances of that happening are slim. Softbank will not rethink its New York plans – nor should it.”

SoftBank acquired the Cambridge-headquartered company for $32bn (£23.4bn) in 2016 in a move widely criticised as relinquishing the “crown jewel” of British tech.

Providing a further headache to Arm, the company’s China CEO Allen Wu was fired last week and is refusing to leave.

Should Arm shun London it will come as a blow to the UK government, which has been seeking to attract more tech businesses to list in London with recent post-Brexit IPO reforms.

Last month saw London-based BenevolentAI begin trading on Amsterdam’s Euronext market.

UK tech IPOs raised a record £6.6bn, double the amount in 2020, counting Deliveroo and Moonpig amongst them.