A cloud of betrayal fell over London when prized British semiconductor designer ARM Holdings this week pipped for a New York listing over its home ground.
Now owner SoftBank has announced just how much of a hole ARM is set to leave in the City: The Japanese conglomerate has pitched Arm’s valuation as high as US$70bn, or 58 billion in Pound Sterling.
That would have placed ARM snugly between GSK and Relx at FTSE’s 11th-largest company and easily the largest technology group of the whole index.
In fairness, that is the top end of SoftBank’s US$40bn to US$70bn valuation estimate, but the message remains the same.
ARM was previously a FTSE 100 company until SoftBank took it private in 2016 through an offer valuing the company at over £24bn.
The Cambridge-headquartered tech group wasn’t exactly opaque about its feelings towards the UK government’s approach to the tech sector.
Arm co-founder Jamie Urquhart rubbished the government’s long-term tech strategy just a day before the big snub, stating that it “couldn’t be any worse than it is at the moment” in a Bloomberg interview.
“Even now we are waiting for the government to come out with a semiconductor strategy,” Urquhart said. “There’s very little here in the UK and on the things we are worried about, the Chinese already own them.”
Co-founder Hermann Hauser has made similar statements in the past.
“This comes as further confirmation that plans to rebrand the LSE as a high-growth tech aren’t working,” said analysts and Hargreaves Lansdown.
Baby please don’t go
Sunak had renewed talks with ARM’s parent company SoftBank in an effort to persuade the group to stay in London, but clearly those talks weren’t persuasive enough.
Not even the government’s loosening of listing rules to persuade tech companies to consider a London placing was enticing enough for Arm.
As earlier mentioned in Proactive, it may be just one of many major FTSE 100 constituents to jump across the pond.
After Deliveroo’s and THG’s IPO disasters in 2021, the London Stock Exchange could have done with a win.
Perhaps London-based adults-only subscription platform OnlyFans will renew talks of a potential IPO. There’s a good chance it’s Britain’s most-valuable start-up, after all.