Chancellor rolls out red carpet for Arm to return to London amid growing doubts over £30bn chipmaker takeover
Rishi Sunak rolled out the red carpet last night for Arm’s return to the London stock market amid growing doubts over the £30bn takeover of the British chipmaker.
The chancellor said he wanted to make the city “an incredibly attractive place” for businesses to mention “whether poor or anyone else.”
His comments came when owner Softbank tried to sell Arm for £30 billion to US giant Nvidia. However, the deal has been stalled by regulatory scrutiny, prompting Softbank to consider a UK listing if the takeover falls through.
Charm offensive: Chancellor Rishi Sunak (pictured) said he wanted to make the city ‘an incredibly attractive place’ for businesses to mention ‘whether poor or anyone else’
City luminary Ken Costa, the former banker of UBS and Lazard, said a London stock exchange was a “credible alternative” worth considering.
“This Cambridge-based company must not fall into the hands of a single competitor, be it Nvidia or anyone else,” he wrote in the Financial Times. Asked about this suggestion, Sunak declined to discuss the Nvidia deal in detail, but the government moved heaven and earth to entice more tech companies to join the list in the UK.
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Rishi Sunak said: ‘I think we have always been an economy that benefits from investment and I would see it as a sign of confidence in the UK economy. If international investors, whoever they are, are eager to invest their capital in the UK, that’s good news for our economy.
“This is currently a very attractive place to invest globally and that is what we need as we want to boost recovery and create jobs.” His comments come despite concerns about the massive debt associated with many private equity takeovers, as well as their relentless tactics to cut jobs and turn a profit.
Sunak said, “Overall, I want to make this a really attractive place for companies to be on the list.
“That’s why I hired Jonathan Hill to review the listing rules.
“There’s a range of things we do in terms of listing and, whether it’s Arm or anyone else, I want to make sure this is an incredibly attractive place for companies to raise capital.”
Arm was Britain’s largest publicly traded technology company before it was bought by Softbank in 2016 for £24 billion.
If the company were to return with a value of £30 billion, it would rank among the largest public companies in the country alongside Barclays, Lloyds Banking Group and Vodafone.
Nvidia launched an offer for Arm last September, but has since admitted the process is taking longer than expected.
In the UK, the Competition and Markets Authority is calling for an in-depth investigation, while the EU gears up to investigate the deal and regulators in China have yet to formally look into it.
Nvidia has said it will walk away if the deal isn’t sealed by September 2022.
Concern about the offer is based on Arm’s position as a neutral supplier of chip designs to customers around the world.
This approach led to Arm being called the ‘Switzerland of semiconductors’, with his designs that can be used in a plethora of devices around the world.
But critics fear that this neutrality will be jeopardized by the acquisition of Nvidia – a suggestion the American company vehemently denies.