Discussions come as SoftBank prepares to list chip designer on Nasdaq next month at a $60-billion to $70-billion valuation
SoftBank Group Corp is in talks to acquire the 25 per cent stake in Arm Ltd it does not directly own from Vision Fund 1 , a $100-billion investment fund it raised in 2017, according to people familiar with the matter, potentially delivering a win for investors who have waited years for strong returns.
The alternative – letting VF1 sell its Arm shares in the stock market over time following the initial public offering – would typically take at least one to two years given the size of the stake. It would also be more risky for the fund’s investors since it is possible that Arm’s shares could drop following the IPO.
Son, who has hired investment bank Raine Group to advise SoftBank on the negotiations, has recused himself from VF1′s deliberations on the matter so that the fund makes a decision independently in the interest of its investors, the sources said. If a deal is inked, SoftBank would be selling fewer Arm shares in the IPO and would be likely retaining a stake of between 85 per cent and 90 per cent, according to the sources, who requested anonymity because the negotiations are confidential.
The investment giant has been in “defence mode” since May 2022 after technology valuations crashed amid a rise in interest rates and economic uncertainty. But in June, Son said he was planning to shift to “offence” mode amid excitement over advances in artificial intelligence.
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