SoftBank chief Masayoshi Son will this week sign off on an agreement with Nasdaq to list chip designer Arm, setting in motion a blockbuster initial public offering as early as this autumn.
According to two people familiar with the situation, the Japanese investment group and New York exchange reached a tentative agreement over Arm’s proposed listing on Monday, with Son expected to sign off officially later this week.
The move represents the first formal step in the IPO process, as SoftBank continues to work towards submitting filing documents for Arm. That would end speculation over Son’s plans for the Cambridge-based company after a deal to sell it to rival Nvidia collapsed in early 2022.
SoftBank and Arm declined to comment.
Son recently stepped back from front-line management of SoftBank’s other investment activities to concentrate on the turnround and float of Arm.
Long-term holders of SoftBank stock in the US, Japan and UK say they continue to wrestle with a realistic valuation of Arm, which SoftBank bought for £24.3bn in 2016.
Investors said that given the difficulty of directly comparing Arm with any other company, and of knowing whether Son has yet hit on a formula to make the company more profitable, a realistic valuation could be as low as $30bn or as high as $70bn.
People close to SoftBank had previously identified Goldman Sachs, JPMorgan and Mizuho Securities as those likely to be selected to run the IPO process, though the final list is expected to draw in other global investment banks.
Those familiar with the Nasdaq agreement said the proposal, as it stood, did not envisage Arm being dual-listed on another exchange.
Efforts by London to secure a dual or secondary listing for Arm have involved direct interventions from the most senior tiers of the UK government, including Prime Minister Rishi Sunak.
The success of the IPO will be critical for SoftBank to engineer a turnround as analysts expect the group to log two straight years of losses when it reports its results next month.
To bolster its balance sheet, the highly leveraged conglomerate has sold shares in Chinese ecommerce group Alibaba, but the valuation of its technology investments have continued to suffer amid a global tech rout and rising interest rates.
Ahead of the IPO, Son has focused on revamping Arm’s business model to drive up its profits. The Financial Times reported last month that Arm was seeking to raise prices for its chip designs in one of the biggest shake-ups to its business strategy in decades.
Additional reporting by Tim Bradshaw in London