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SoftBank's Arm registers for blockbuster U.S. IPO

Published 04/29/2023, 11:08 AM
Updated 04/29/2023, 01:40 PM
© Reuters. A smartphone with a displayed Arm Ltd logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration
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By Anirban Sen and Echo Wang

NEW YORK (Reuters) -SoftBank Group Corp's chip maker Arm Ltd has filed with regulators confidentially for a U.S. stock market listing, Arm said on Saturday, setting the stage for this year's largest initial public offering.

The IPO registration shows that Softbank (OTC:SFTBY) is pressing ahead with the blockbuster offering despite adverse market conditions, after saying in March that it planned to list Arm in the U.S. stock market.

U.S. IPOs, excluding listings for special purpose acquisition companies, are down about 22% to a total of just $2.35 billion year-to-date, according to Dealogic, as stock market volatility and economic uncertainty put many IPO hopefuls off.

Arm plans to sell its shares on Nasdaq later this year, seeking to raise between $8 billion and $10 billion, people familiar with the matter said. In a statement, which confirmed an earlier Reuters report on the planned IPO, Arm said the size and price range for the offering has not yet been determined.

The sources cautioned that the exact timing and size of the IPO are subject to market conditions and asked not to be identified because the matter is confidential.

SoftBank and Arm declined to comment.

There are signs that the IPO market is beginning to thaw. Johnson & Johnson (NYSE:JNJ) Inc is preparing to list its consumer health business Kenvue Inc in New York next week, hoping to raise about $3.5 billion.

SoftBank has been targeting a listing for Arm since its deal to sell the chip designer to Nvidia (NASDAQ:NVDA) Corp for $40 billion collapsed last year because of objections from U.S. and European antitrust regulators.

Since then, Arm's business has fared better than the broader chip industry thanks to its focus on data center servers and personal computers that generate higher royalty payments. The company said sales were up 28% in its most recent quarter. 

Arm's IPO is expected to boost the fortunes of SoftBank, which is battling to turn around its giant Vision Fund, which has been hit by losses due to the declining valuations of many of its holdings in technology startups.

© Reuters. A smartphone with a displayed Arm Ltd logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration

Earlier this year, Arm rebuffed a campaign from the British government to list its shares in London and said it would pursue a flotation on a U.S. exchange.

Arm's IPO preparations are being led by Goldman Sachs Group Inc (NYSE:GS), JPMorgan Chase & Co (NYSE:JPM), Barclays (LON:BARC) and Mizuho Financial Group.

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