SoftBank is said to pitch US$10 billion IPO of chip designer Arm

SOFTBANK Group has started testing investor appetite for an initial public offering (IPO) of British chip designer Arm, which could raise as much as US$10 billion, people with knowledge of the matter said.

The Japanese conglomerate may launch the share sale in New York as soon as September, said the people, who asked not to be identified discussing private information. The IPO is on course to be the largest globally this year, data compiled by Bloomberg show.

ARM last month confidentially filed for a US listing. Goldman Sachs Group, JPMorgan Chase, Barclays and Mizuho Financial Group were named as IPO banks in the filing, according to the people. A left lead bank hasn’t been identified yet, they said. More banks are expected to be added to the line up.

Deliberations are ongoing and final decisions on the size and timing of the IPO will be taken subject to conditions in the stock markets, the people said. Representatives for Arm, Goldman Sachs, JPMorgan, Mizuho and SoftBank declined to comment, while a spokesperson for Barclays didn’t immediately provide comment.

SoftBank’s founder Masayoshi Son has said he hopes the ARM IPO can be the largest ever by a chip company. Bankers have pitched a valuation of US$30 billion to US$70 billion for Arm, a wide range that reflects the challenges of valuing the Cambridge, England-based firm against a backdrop of volatile semiconductor equity prices.

Arm’s net sales rose 28 per cent to 92.8 billion yen (S$920 million) in the fourth fiscal quarter, compared with a year earlier. It lost 6.2 billion yen in the quarter though after making 10.1 billion yen a year earlier. BLOOMBERG