Rishi Sunak revives talks with SoftBank on London listing for Arm

Rishi Sunak has revived efforts to secure London a role in the planned initial public offering of UK tech group Arm, after months of political turmoil in Westminster derailed an attempt last year.

The UK prime minister met Arm chief executive Rene Haas last month in Downing Street, with Masayoshi Son, the founder of SoftBank, Arm’s Japanese owner, joining via video, according to two people familiar with the matter.

SoftBank has previously indicated that it wants to list Arm, the chip designer that it acquired in 2016 for $32bn, in New York. The renewed London lobbying effort, which includes executives from the London Stock Exchange, is focused on trying to share the listing with New York, according to people briefed on the discussions.

Last month’s meeting, which was also attended by Arm’s chief legal officer Spencer Collins, was described as “very constructive” by two people briefed on it, and “positive” by another. Andrew Griffith, the UK’s City minister, is also involved in the talks with SoftBank.

Nevertheless, officials and LSE executives still face an uphill struggle to persuade SoftBank because of the higher cost and complexity of such a move, according to people familiar with the matter.

Under plans drawn up last year by British officials and stock exchange executives for an unconventional dual listing, Arm would float simultaneously in New York and London. In the past, companies have dismissed this approach because of the expense and complexity.

A single listing in New York remained SoftBank’s preference during last year’s frantic lobbying effort, but executives at the Japanese group had not ruled out a dual listing, according to two people briefed on the group’s thinking.

Under Boris Johnson, the Conservative government embarked on a series of reforms to London’s listings regime in a drive to make the UK capital a credible alternative to New York for tech companies looking to go public. Last year’s lengthy lobbying effort of SoftBank and Arm was undermined by the political tumult that engulfed the UK.

Convincing Arm, which was founded in Cambridge and retains its headquarters there, to have a listing in London would be seen as a significant vote of confidence in the UK market.

Arm was listed in London, with a secondary listing in New York, before SoftBank bought the company shortly after the 2016 Brexit vote. It would be the largest tech group on the London Stock Exchange if it were to return to the UK capital.

The pressure to float Arm early this year had eased, the people said, adding that SoftBank was now likely to wait until later in the hope that market conditions improved. SoftBank is seeking to return Arm to the public markets after a £66bn sale to US chipmaker Nvidia collapsed early last year.

Intel’s IPO of its autonomous driving company Mobileye last October is seen within SoftBank as evidence that there could be scope for a successful listing this year, according to one person familiar with the matter.

Son, one of the world’s biggest tech investors, said in November that his sole focus would now be the chip designer, describing it is as “the source of my energy, the source of my happiness, the source of my excitement”.

Arm, which is best known for chips used in smartphones, has expanded to supply designs for cars, data centres and other consumer electronics.

One person involved in last year’s lobbying said that “the best possible scenario (for London) would be to list common equity in both markets at the same time, tapping into pools of liquidity in both”.

SoftBank, Arm and the cabinet office declined to comment.

Additional reporting by Jim Pickard