The UK chip designer Arm will be valued at up to $52bn (£41.4bn) when it floats on the New York stock exchange.
The listing will raise less than its owner, SoftBank, had hoped, but could still deliver a fees bonanza of $100m to investment banks working on the deal.
Arm aims to sell 95.5m shares, priced between $47 and $51 each, an amended document filed with the US Securities and Exchange Commission on Tuesday shows. That would raise up to $4.87bn for SoftBank, the Japanese conglomerate that owns the Cambridge-based semiconductor designer.
SoftBank would hold more than 90% of Arm’s shares after the stock market flotation, indicating the company would be valued at between $48bn and $52bn.
That is a substantial cut from the $64bn value SoftBank put on Arm last month, when it bought the 25% it did not already own from Saudi Arabia’s Vision Fund.
Even at this lower valuation, Arm could still be the biggest initial public offering (IPO) of the year so far.
According to Bloomberg, the investment banks working on Arm’s IPO are set to share 2% of the funds raised by SoftBank, implying they could receive about $100m in fees.
Arm’s amended F-1 filing also shows that many major clients, or “cornerstone investors”, have expressed interest in buying Arm shares in the IPO. This includes Advanced Micro Devices, Apple, Cadence Design Systems, Google International, Intel, MediaTek, Nvidia, Samsung, Synopsys and TSMC Partners.
Arm’s decision to float in New York, rather than London, was “a kick in the teeth” for Rishi Sunak’s government as it attempted to revitalise the City after Brexit, said Victoria Scholar, the head of investment at stockbroker Interactive Investor.
“But the allure of New York as a key destination for listings is clear – it offers attractive valuations and high trading volumes, meaning more liquidity and lower spreads, all draws for traders and investors as well as public companies,” Scholar said.
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“The FTSE 100 has been criticised for being the ‘Jurassic Park’ stock market index because of a shortage of businesses in new industries such as AI, fintech and renewable energy.”
SoftBank acquired Arm in July 2016 for £24.3bn, when the fall in the value of the pound after the EU referendum made UK companies more attractive to overseas buyers.
An attempt to sell Arm to the chip giant Nvidia for $40bn collapsed last year due to regulatory hurdles, prompting SoftBank to turn to a stock market float instead.
