One of Britain’s biggest technology companies is poised to snub Government overtures and float in the US, after regulators forced its owners to abandon plans for a $40bn (£30bn) sale.
Arm, a microchip maker responsible for designs used by tech companies across the world, is expected to list in New York before the end of the year.
It follows the collapse of an attempted sale of Arm to Silicon Valley titan Nvidia by the Cambridge-based company’s owner, Japanese investor SoftBank.
Masayoshi Son, the chief executive of SoftBank, said he is now planning to take Arm to the Nasdaq exchange within the next year.
The decision is a blow to Boris Johnson after efforts by ministers to raise London’s profile as a tech hub. A Government spokesman said: “Following last year’s record number of IPOs in London, we continue to work hard to support and encourage firms to list and grow here.”
Arm was previously listed on the London Stock Exchange before being bought by SoftBank for £24bn in a raid in 2016 during the aftermath of the Brexit vote.
But Mr Son said interest from Arm’s US customers and potential investors made the Nasdaq, which is known for assigning higher valuations to technology companies than London, the most likely venue. The rival New York Stock Exchange could be another option, he added.
Mr Son said: “Users or customers of Arm, most of them are in Silicon Valley, and the investors show strong interest in Arm, that’s what I heard in the US.
“So from that perspective, Nasdaq, which plays a key role in the high-tech sector, might be most suitable. [It] is the centre of the high-tech industry.”
Nvidia and SoftBank’s boards decided to terminate the deal, 18 months after announcing it, under the weight of competition investigations in the UK, US, China and Europe.
The Culture Secretary Nadine Dorries had ordered a national security investigation into Arm’s sale, while the US government had sued to block it.
Mr Son told investors that “major players in the industry” had been against the deal as well as competition regulators. The microchip company Qualcomm, one of those which opposed the deal, has floated the idea of a coalition of tech companies acting as cornerstone investors in a flotation.
SoftBank will receive a $1.25bn break fee, which has already been paid by Nvidia as a deposit, as a result of the deal breaking down.
Jensen Huang, Nvidia’s chief executive, said: “Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come.”
Simon Segars, Arm’s chief executive, said yesterday that he would step down with immediate effect. He will be replaced by Rene Haas. Mr Haas said he would follow Mr Segars in running Arm from Silicon Valley, but pledged that Arm’s headquarters would remain in Cambridge.
Arm, founded in 1990, designs microchip technology that features in smartphones, laptops and billions of internet-of-things devices.
SoftBank revealed yesterday that the company’s revenues in the last nine months had climbed by 40pc to $2bn. Mr Haas said its improving performance would allow it to continue to invest in staff despite the pressures of being a public company.
Mr Segars had previously warned that going public, instead of being sold to Nvidia, would “suffocate our ability to invest, expand, move fast and innovate”.
The deal’s collapse is a blow to SoftBank, since it is seen as unlikely to recoup the same sum when floating Arm. The rise in Nvidia’s share price since the $40bn cash and shares deal was announced means the deal would have been worth around $66bn.