SoftBank’s Arm launches IPO courting T Rowe in $52-B valuation ask
SoftBank Group’sHoldings Ltd launched the roadshow for its blockbuster initial public offering () on Tuesday as the chip designer tries to convince investors it is worth as much as $52in this year’s biggest share sale.
kicked off its roadshow in Baltimore, where influential asset manager TPrice is headquartered, underscoring the fund manager’s significance in bigs.
TPrice has been an anchor investor in some of the biggest stock market debuts, including that of electric car maker Rivian Automotive Inc, which was valued at $66.5in itsin 2021.‘sis the largest since then.
met also with other potential investors on Tuesday, including Arlington, Virginia-based Sands Capital, according to sources who requested anonymity discussing private meetings.
SoftBank is offering 95.5 million American depository shares of Cambridge, England-basedfor $47 to $51 apiece and is looking to raise up to $4.87at the top of the range.
READ: SoftBank-backed chip designer Arm reveals filing for blockbuster U.S. IPO
disclosed the proposed range would value it at between $48and $52. It also revealed that it could issue some shares as compensation for its employees, taking its, on a fully diluted basis, at up to $54.5.
Thethatis chasing represents a climb-down from the $64at which SoftBank last month acquired the 25-percent stake it did not already own in the company from its $100Vision Fund.
Yet even with this more modest, SoftBank would fare better than its $40deal to sellto Nvidia Corp, which it abandoned last year amid opposition from antitrust regulators.
READ: SoftBank’s Arm Ltd aims up to $70B valuation in Sept IPO – Bloomberg News
Jamie Mills O’Brien, portfolio manager at British fund manager Abrdn, said he foundin the“more palatable than initially discussed.”
“We are watching closely how the company handles the relationship with its China business – alongside any further impacts from the technology ‘war’ between China and the United States,” he said.
The Japanese conglomerate will own 90.6 percent of‘s ordinary shares after the offering closes, the company said, adding that it will not receive any proceeds from the.
has signed up many of its major clients as cornerstone investors in its, including Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel and Samsung Electronics.
said the investors have indicated an interest in buying a total of $735 million of the stock being sold in the offering.
Return to the public markets
was founded in 1990, as a joint venture between Acorn Computers, Apple Computer, and VLSI Technology.
Its shares traded on the London Stock Exchange and the Nasdaq from 1998 until 2016, when it was taken private by SoftBank in a deal that valued it at $32.
‘s listing is expected to buoy themarket globally and fuel other startups toward going public as its success would signal the return of investor appetite for technology companies.
READ: IPO-ready firms waiting on the sidelines
Several other big names including grocery delivery service Instacart Inc, marketing automation platform Klaviyo and footwear brand Birkenstock are expected to list their shares on U.S. exchanges in the coming weeks.
It will also be a milestone for SoftBank, as it taps several marquee technology names as investors to drum up support for the company whose designs power more than 99 percent of the world’s smartphones.
Reuters first reported onproposed price range for theon Saturday. Sources also said it could possibly raise this range before theprices, should investor demand prove strong.
generates a big share of its revenue through royalty fees based on either the average selling price of the customer’s-based chip or a fixed fee per chip.
For the year ended March 31,‘s sales fell to $2.68, hurt mainly by a slump in global smartphone shipments.
Unlike most loss-making but high-growth tech companies that debut with loftys but later plummet below list price,is profitable. This is expected to significantly reduce investor anxieties, analysts have said.
Sara Russo, senior analyst at Bernstein, said it is early days forto benefit from the boom in artificial intelligence but the space represents an area of potential growth for.
Analysts have saidcan potentially ride on Nvidia’s coattails, which has been the biggest beneficiary of the AI boom with the stock surging more than 230 percent year-to-date, as its chips must be coupled with energy-efficient central processing units (CPUs) –‘s specialty.
Barclays, Goldman Sachs, JPMorgan Chase, and Mizuho Financial Group are the lead underwriters for the offering.
If the underwriters exercise their right to buy shares inin full as part of ‘greenshoe option’, it would take theamount to be raised to $5.2.
, which has tapped a total of 28 banks for the, has not picked a traditional “lead left” bank and will split underwriter fees evenly among the top four banks.
expects to trade on the Nasdaq under the symbol ““.