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SoftBank Pauses Talks for Arm London Listing on UK Political Turmoil

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·2 min read
SoftBank Pauses Talks for Arm London Listing on UK Political Turmoil
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(Bloomberg) -- SoftBank Group Corp. has temporarily paused talks about listing shares of its chips division, Arm Ltd., in London because of turmoil in the UK government, while it continues to pursue an initial public offering for the business in New York, according to people familiar with the matter.

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SoftBank founder Masayoshi Son has repeatedly said his primary focus is to take Arm public in the US because of its deep investor base and attractive valuations. In June, Son said he would also consider a London listing, in part because of political appeals.

The resignation of outgoing UK Prime Minister Boris Johnson, which was preceded by the walkout of many leading officials in his administration, has put those talks on hold for now, said the people, asking not to be named because the discussions are private. Investment minister Gerry Grimstone, who played a leading role in talks with SoftBank, is one of the officials who resigned.

You can’t negotiate if there is no one on the other side to talk with, one of the people said, adding that the pause hasn’t changed SoftBank’s attitude toward a London Stock Exchange deal. A listing in Arm’s home market could still happen, but SoftBank remains focused on the US in 2023, according to the people.

SoftBank declined to comment. The company’s shares were little changed in morning trading in Tokyo on Tuesday.

The Financial Times reported earlier that SoftBank had halted work on a London IPO.

Arm, which the Japanese company acquired in 2016, is based in Cambridge, England. Arm was one of the UK’s most important technology companies before the purchase and still has the majority of its operations there. Johnson’s administration had lobbied hard to bring at least part of any initial public offering to the UK’s capital market.

Arm sells and licenses technology that’s used by semiconductors in everything from smartphones to supercomputers. The pervasiveness of its products has made its planned IPO a closely watched event in the $550 billion chip industry.

Son has said he plans to sell a portion of Arm before the end of the company’s financial year next March.

The prospect for a return on his $32 billion purchase of Arm have dimmed as investors have shied away from chip-related stocks. The benchmark Philadelphia Stock Exchange Semiconductor Index has lost almost a third of its value in 2022.

(Updates with SoftBank’s response)

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