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British chip designer Arm poised to snub London for New York

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Masayoshi Son Softbank Arm New York Nasdaq - REUTERS
Masayoshi Son Softbank Arm New York Nasdaq - REUTERS

The billionaire boss of Japanese investment giant SoftBank has said New York remains the favourite location for a listing of British chip designer Arm despite a “strong love call” from London.

Speaking at his company’s annual general meeting, Masayoshi Son told shareholders that an American float made more sense because most of Arm’s customers are based in Silicon Valley.

The stance is a blow to Boris Johnson’s Government, which has launched a major charm offensive to convince Softbank to list the Cambridge-based company in the UK.

Rishi Sunak reportedly held two meetings with Arm and SoftBank executives over the last six weeks to talk about the company’s future.

During those talks, the Chancellor is said to have raised the possibility of the Government taking a “golden share” to prevent a foreign takeover of Arm in future.

Mr Son said Softbank had received a "strong love call" from London.

Government officials have reportedly also floated the prospect that national security rules could be used to force a listing in London.

Although Mr Son said a final decision had not yet been made, on Friday he appeared to suggest New York was the front runner.

“Nasdaq is the favourite,” he told shareholders, adding that American stock markets would also “love to have Arm”.

Arm, which SoftBank acquired in 2016, is headquartered in Cambridge and still has most of its operations there.

The business was the UK’s biggest listed technology company before the takeover, which was agreed just months after the Brexit vote.

SoftBank is planning to float the business after a sale to US chipmaker Nvidia fell through due to industry and regulatory opposition.

A US-only listing for Arm would be a major blow to the UK Government’s efforts to woo more tech listings to London.

However, SoftBank is reported to be considering a partial listing of Arm in London. That would represent a partial victory for ministers but details of the float remain scant.

SoftBank has been pushing forward with plans to slash jobs at Arm’s UK operations as float talks drag on.

Staff at the Cambridge headquarters have been told to expect 340 to 350 job losses in the UK, out of the total 3,560 British staff.

Rene Haas, Arm’s chief executive, has said the cuts are needed to remain competitive and “stop work that is no longer critical to our future success”.

The job cuts, which affect around 15pc of its workforce globally, were set to be largely completed last month.

It came despite Arm enjoying record profits and sales in the last year.

The company grew annual revenues by a third and profits rose by two thirds to $1bn in its last fiscal year.

On Friday it separately emerged that SoftBank is set to pay Marcelo Claure, the company's former operating chief, a severance package worth an estimated $94m.

He left the business in January with a severance worth $34m, SoftBank said, but his compensation is also set to include another $60m worth of stock awards.

His exit followed a reported clash with Mr Son over compensation, after Mr Claure had sought more power and $1bn in pay.

Before leaving, he had been one of the SoftBank boss’s top lieutenants.