SoftBank in talks to buy Arm stake from Vision Fund ahead of IPO

SoftBank Arm Image credit: Sundry Photography / Shutterstock

SoftBank is in talks to acquire an additional 25% stake in Arm held by its venture funds ahead of the semiconductor firm’s upcoming IPO, according to reports.

Sources have told Reuters that SoftBank, which currently owns three-quarters of the Cambridge-based chip firm, is in talks to buy up the remaining equity currently held by other participants in the Japanese group’s $100bn Vision Fund.

These talks come as SoftBank continues preparation for Arm’s IPO in New York later this year.

The deal would represent a much-needed return for backers in the Vision Fund, which includes the Public Investment Fund from Saudi Arabia and Mubadala, and the sovereign wealth fund of the UAE.

The latest financial reports from SoftBank revealed a £71m quarterly loss from the two Vision Funds, which followed repeated losses and job cuts.

SoftBank is said to be seeking a valuation of between $60bn and $70bn for Arm, which it acquired for $32bn in 2016. That valuation could put the Vision Fund stake’s value as high as $17.5bn (£13.8bn).

Should the deal not go through, the Vision Fund 1 members could sell their stakes on the public market following Arm’s IPO. However, this would put the value of the sale subject to stock prices.

For SoftBank, the deal would give the company full ownership of Arm ahead of the IPO, which is currently expected in September. This would put the firm in a stronger position to retain stock in the company when it initially begins trading.

UKTN has reached out to SoftBank for comment.