Several tech biggies have reportedly agreed to invest in ARM’s initial public offering (IPO) next week. According to Reuters, Google, Samsung, Apple, Intel, AMD, Nvidia, Synopsys, and Cadence Design Systems will all participate as investors in the British semiconductor design company’s offering. ARM is also in talks with a few other firms to invest in the IPO, people familiar with the matter told the publication.
SoftBank Group, the Japanese owner of ARM, initially wanted to sell the company. It had reached an agreement with Nvidia but regulatory hurdles blocked the deal. The firm then sought a strategic alliance with Samsung but seemingly didn’t work out either. SoftBank eventually decided to make ARM public, selling its shares on the New York-based stock exchange Nasdaq. It’s targeting a valuation of $50-$55 billion for the IPO.
Ahead of that, ARM is seeking anchor investors with plans to raise about $8-10 billion. It has been in talks with many tech companies since at least June this year, including several of the aforementioned names. It turns out the British firm has persuaded most of them to invest in its blockbuster IPO next week. These companies will reportedly invest between $25 million and $100 million each in ARM’s offering.
ARM customers are scrambling to pick shares in the IPO
ARM has set aside ten percent of the shares for its clients, the new report states. However, that may prove to be a little low. Its clients are reportedly scrambling to pick shares in the IPO. They believe investing in the company would strengthen their commercial relationship with ARM. More importantly, it wouldn’t allow rivals to gain an edge over them. That’s important because ARM makes CPU designs used by pretty much every chipmaker.
The British firm, on the other hand, is being wary to not pick sides. ARM wants multiple anchor investors to make it harder for any big company to acquire it in the future, but without affecting its relations with anyone. Note that an anchor investment won’t give the investor board seats or control over the company. It remains to be seen if the chip designer gets more big names onboard ahead of the planned IPO next Wednesday, September 13.
E-commerce giant Amazon, which has been in talks with ARM for anchor investment in the IPO, has reportedly decided to not participate in the much-anticipated offering. The British firm’s stock trading on the Nasdaq will begin on Thursday, September 14.