As Arm is gearing up for its IPO at New York Stock Exchange later this year, it is allegedly courting Intel and Nvidia in an attempt to attract them both to become its anchor investors, according to reports from Bloomberg and Financial Times. Attracting anchor investors can drive the valuation of SoftBank-backed Arm, which is facing competition from multiple directions amid a semiconductor market slump.
Negotiations around Arm's valuation are ongoing between the potential investors and Arm. Nvidia, which failed its $66 billion takeover of Arm in 2022, is interested in a share price that reflects Arm's overall value between $35 billion and $40 billion, Financial Times reports citing a source familiar with these conversations. Meanwhile, Arm's aspirations are higher, closer to a valuation of $80 billion.
Arm is aiming to generate up to $10 billion through a listing in New York later this year. Incorporating anchor investors like Intel and Nvidia can boost enthusiasm and drive momentum in an IPO, particularly when the market for new listings is challenging. Should the negotiations prove fruitful, Intel and Nvidia would be noted in Arm's IPO prospectus prior to the listing, which would maintain stability in the stock's value.
Masayoshi Son, SoftBank's founder, has been personally engaged in securing anchor investors for Arm as he focused on boosting the chip designer's revenue prior to its IPO, according to the Financial Times.
Arm and Nvidia have reportedly reached out to U.S. regulators to pre-emptively address any potential issues regarding what is anticipated to be a minority investment of a few hundred million dollars, FT reports. Previously authorities in the U.S. and Europe prevented Nvidia from taking over Arm over concerns of limited access to Arm's IP for competitors. Apparently, Nvidia still wants a piece of Arm, but it is now more eager to negotiate about the price as it gets only a take.
So far, neither Arm nor Intel nor Nvidia commented on the talks according to Bloomberg and Financial Times.
