City watchdog may ‘ease rules’ in order to secure $40bn Arm listing
The City watchdog is considering easing rules in an attempt to win the $40bn (£34bn) listing of Cambridge-based technology firm Arm Holdings, it has been reported.
Officials are said to be locked in talks in a last-ditch attempt to persuade the semiconductor chip-maker’s Japanese owner SoftBank to consider a dual listing on the London Stock Exchange alongside New York’s Nasdaq technology market, according to the Sunday Times.
SoftBank could make an announcement about its plans as early as Tuesday, when it publishes its latest results.
Arm is said to be concerned that rules on “related party transactions” would require it to report on any dealings with either its owner SoftBank or the hundreds of other companies in which the Japanese investment firm has a stake.
Officials from the Financial Conduct Authority, which regulates financial markets, are reported to have offered to ease the rules, possibly the first such move since a failed attempt to win the flotation of state-backed oil company Saudi Aramco in 2017 by then prime minister Theresa May.
Arm wrote to private shareholders last year saying its initial public offering (IPO) would not take place until well into this year, scotching hopes that it would float by the end of March.
The delay raised anxiety among UK ministers, who had lobbied the company to list in London to help secure the City’s reputation as a potential destination for high-profile tech IPOs over rivals including New York.
A succession of prime ministers, including Boris Johnson and Liz Truss, and now Rishi Sunak, have lobbied to secure the high-profile listing for the UK.
Arm was a FTSE 100 company until it was bought by SoftBank in 2016 for £24bn. A takeover by Nvidia collapsed last year due to insurmountable regulatory hurdles.
Analysts have previously estimated that Arm – whose chip designs are used by more than 500 clients including Apple, Samsung and Google in products ranging from iPads and mobile phones to cars and smart TVs – could be worth up to $40bn when it goes public.
However, the market valuations of big tech companies including the Facebook owner Meta, Google’s parent company Alphabet, and Amazon have slumped over the past year, amid signs that surging inflation, rising interest rates and economic uncertainty are hitting consumer demand.
The Treasury declined to comment on the report.