SoftBank Group Corp is in talks to buy back the 25% stake in Arm Ltd it does not directly own from Vision Fund 1 (VF1), a $100 billion investment fund it raised in 2017, Reuters reported on Monday.
The negotiations come as SoftBank, which currently owns 75% of Arm, is preparing to list the chip designer on Nasdaq next month at a valuation of $60 billion to $70 billion, according to the report.
The exact valuation for Arm that the two sides are discussing for their transaction could not be learned, and the sources cautioned that it is possible that no agreement will be reached, Reuters said.
If a deal is inked, SoftBank would be selling fewer Arm shares in the IPO and would be likely retaining a stake of between 85% and 90%, according to the sources, who requested anonymity because the negotiations are confidential.
SoftBank, VF1 and Arm declined to comment. Raine, an investment bank that is advising SoftBank on the deal, did not immediately respond to requests for comment, Reuters added.
Arm’s IPO would be a boon not just for VF1 but also for SoftBank, which reported its third consecutive quarterly loss last week. It was hit by declines in the valuations of major holdings such as Chinese e-commerce firm Alibaba Group, German telecommunications company Deutsche Telekom and U.S. wireless carrier T-Mobile U.S…
SoftBank, which took Arm private for $32 billion in 2016, sold a 25% stake in the company to VF1 for $8 billion in 2017. SoftBank has also been in talks with several technology companies about bringing them onboard as cornerstone investors in Arm ahead of its IPO, including Amazon.com Inc, Reuters has reported.
SoftBank last week said VF1 delivered a gain of $12.4 billion on $89.6 billion of investments, while VF2, a second fund it raised in 2019, carried a $18.6 billion loss on $51.8 billion of investments.
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