SoftBank Group is in advanced discussions to buy the 25% stake in chip designer Arm Holdings from Vision Fund 1 (VF1), potentially offering a significant return to investors who have been awaiting robust yields, according to sources cited by Reuters.
SoftBank, which currently holds 75% of Arm, is gearing up to list the company on Nasdaq next month, targeting a valuation between $60 billion and $70 billion.
A successful negotiation would provide immediate gains to VF1 investors, including Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala, who previously faced losses from SoftBank's investments in startups like WeWork and Didi Global, the Reuters exclusive said.
This move could also enhance SoftBank's prospects of securing capital from these investors in the future. Masayoshi Son, SoftBank's CEO, has recused himself from VF1's decision-making to ensure unbiased deliberations, it added.
The IPO of Arm is anticipated to benefit both VF1 and SoftBank, which recently reported its third consecutive quarterly loss, impacted by declining valuations in major holdings. SoftBank acquired Arm for $32 billion in 2016 and later sold a 25% stake to VF1 for $8 billion in 2017.