The British “national fortune” card was actively played at the stage of discussion of NVIDIA’s deal to buy Arm, which ultimately fell through. Now another problem fascinates the British authorities: they want to see ARM shares not only on the stock exchange in New York, but also in London. The issue of national security could also come up again this time.
Passed earlier this year, the National Security and Investment Act (NSIA), as explained by financial times, allows the UK authorities to intervene in transactions the completion of which could pose a risk to national security. The problem is that Arm’s public stock offering isn’t a takeover deal covered by this law. Some officials are inclined to think that this legal norm could come into force if some of the foreign companies acquire a large stake in Arm after the IPO.
As the source explains, UK authorities have so far used the “carrot method” in negotiations with SoftBank, which is now owned by Arm, not the “stick”. As a hard measure of lobbying Japanese investors, this law isn’t entirely suitable, but unofficial sources say that SoftBank hasn’t scrapped the idea of a dual listing of shares in New York and London recently.
In fact, until 2016, Arm’s shares were listed on two platforms: the London Stock Exchange remained the primary trading floor, while depositary receipts were traded on the New York Stock Exchange. Now, SoftBank expects to raise at least $50 billion in Arm’s IPO, and the U.S. market is opening up more opportunities in that regard. Japanese captive venture fund Vision Fund ended the quarter with a record $26 billion loss as its assets fell in value. It turns out that SoftBank needs money, and as such, placing Arm shares in New York is a priority scenario for the company.