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Chip designer Arm is aiming for a valuation range of $50bn-$55bn in its upcoming initial public offering (IPO). This is lower than the valuation of $64bn proposed by SoftBank, its owner, less than a month ago, as per sources familiar with the plans.
Arm plans to commence its IPO roadshow next week, with participation from its major customers in the technology sector, including Apple, Samsung, Intel, and Nvidia, according to one source. It has also discussed potential investments with some customers in the automotive industry, according to another source.
SoftBank recently agreed to purchase a 25% stake in Arm for $16bn from the Vision Fund, an investment fund managed by the Japanese conglomerate. SoftBank has previously argued that Arm’s valuation should be closer to $80bn.
However, a source familiar with Arm’s plans emphasized that SoftBank remains optimistic about achieving a higher valuation than the initial range. The Wall Street Journal first reported the revised target valuation range.
An individual involved in the deal stated that preliminary meetings with investors had been positive. Starting roadshows with a conservative price range is a common strategy employed by dealmakers in large tech listings to generate momentum.
Nvidia declined to comment, while Apple, Intel, and Samsung have not responded to requests for comments.
SoftBank plans to sell approximately 10% of Arm in the IPO, with strategic investors contributing a relatively small portion of the total funds raised, which is expected to exceed $5bn.
Upon its IPO, Arm is projected to become the most valuable US listing since November 2021, when Rivian, an automaker, debuted with a valuation of $70bn.
This deal is being closely monitored to gauge investor interest in large-scale listings following a significant downturn in dealmaking.
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