London IPO is better for Arm, says co-founder

Arm co-founder thinks it would be better to be an independent company listed on the London Stock Exchange instead of being taken over by an American rival

The Arm co-founder thinks it would be better off being an independent company listed on the London Stock Exchange instead of being taken over by a US rival in a £31billion deal,

Hermann Hauser, who set up Cambridge-based chip designer Acorn Computers in 1990, told the Mail that Arm could be listed as a stand-alone business with some of its biggest customers taking stakes.

His intervention came amid growing opposition to Nvidia’s takeover.

Belief: Arm had been a member of the FTSE 100 for 18 years before being bought out by Softbank

Arm is owned by Softbank of Japan, which bought the company in 2016 for £24 billion. The proposed sale to Nvidia is being scrutinized by regulators around the world.

Arm and Nvidia bosses were forced this month to defend the blockbuster chip deal. They argued that a stock float was not a viable option. In a document submitted to the Competition and Markets Authority, they accused opponents of “romanticizing Arm’s past”. They added that Arm was in no condition to be bailed out via an initial public offering (IPO).

Arm chief executive Simon Segars said: “We considered an IPO but determined that the pressure to generate near-term revenue growth and profitability would stifle our ability to invest, grow , to act quickly and to innovate.”

Hauser, 73, dismissed the comments. He said no one romanticizes Arm’s past, pointing out that the company was a member of the FTSE 100 for 18 years before it was taken over by Softbank.

The tech entrepreneur and venture capitalist said, “The idea that Arm is underperforming just isn’t true.” Look at its breakthroughs in the data center market in recent years.

Austrian-born Hauser believes there is now a 50% chance the deal with Nvidia will fail after the government ordered a full investigation on competition and national security grounds.

The government is expected to make a decision in May, while regulators in China, the United States and the EU are also reviewing the deal.

Hauser, one of Cambridge’s best-known tech community figures, said Softbank “needs to consider other options” – and one option is for Arm to return to London. The Qualcomm client said in June last year that it would be willing to buy a stake in Arm alongside other industry investors if Softbank took the company public instead of selling it to Nvidia. Qualcomm chief executive Cristiano Amon said at the time: “If Arm has an independent future, I think you’ll find there’s a lot of interest from many companies in the ecosystem to invest. in Arm.”

Brokers believe customers like Apple and Taiwan Semiconductor Manufacturing Company – better known as TSMC – would also join Qualcomm.

A broker said: “Finding clients to take a stake in Arm would not be difficult. Softbank could sell the majority and retain a minority stake itself. This solution protects Arm’s neutrality and gives Softbank an exit.

Nvidia agreed to buy Cambridge-based Arm from Softbank in September 2020 and wanted to complete the deal by March this year. This deadline will not be respected.

Comments are closed.