Boris Johnson has joined a final push to persuade chip designer Arm to go public in London, as UK government officials are increasingly concerned about the lasting damage if Britain’s best-known tech company chooses New York to go public.
London Stock Exchange ministers and executives have launched a charm offensive to persuade Arms Japanese owner SoftBank to reconsider their strong preference for listing in New Yorkthe standard target for the world’s largest technology companies.
But even if Britain’s efforts intensify, it is recognized that the chances of getting New York to go public are slim. SoftBank CEO Masayoshi Son in February described the New York Nasdaq exchange as “the best fit” because it is “at the heart of global high-tech.”
The stakes are high for the government, not only because Arm, which was founded and is headquartered in the UK, was previously listed in London before SoftBank bought it in 2016 for a £24.6bn effort to boost a tech sector in the UK, the government said people familiar with lobbying efforts.
“An enormous amount of effort is being put into it,” said one of those involved. “They don’t get any taller than Arm and it would be a huge blow if they left. It would be a very negative signal if they didn’t choose to list here.”
As part of a last-ditch effort, Johnson has written to SoftBank executives, according to people familiar with the matter. The lobbying initiatives span a range of government departments, including the Department for Digital, Culture, Media and Sport (DCMS), the Treasury Department, the Business Department and Downing Street.
Digital Secretary Chris Philp and Gerry Grimstone, the former Barclays chairman who now heads the UK Office for Investments, are leading the lobbying.
According to two people familiar with the plans, as well as LSE executives, Philp and Grimstone are expected to meet with SoftBank executives again in the coming weeks. “There is a political impetus to winning Arm for London,” said one person familiar with the planned meetings. “The government is trying to boost tech subsectors – Arm operates in a very relevant sector and is also politically sensitive.”
Theresa May’s government waved off the Arm takeover in 2016 after SoftBank pledged to keep jobs in the UK despite fears the UK would lose one of its most valuable corporate crown jewels.
SoftBank then returns Arm to the public markets a proposed $66 billion sale to California-based Nvidia collapsed earlier this year after competition authorities intervened.
Two people familiar with SoftBank’s mindset said there was very little opportunity to change plans and list in London, adding that it made more sense to be in New York since it hosts a larger number of retail investors .
Unlike 2017, when London controversially offered to overhaul the listing rules advertise Saudi Aramco, supervisors say there are no simple changes that might entice arm. If the group were listed in London, it would quickly enter the premium segment of the FTSE 100, where it would become the largest technology company.
It’s a point raised by those involved in lobbying, with one saying “in London it would be No. 1. In the US there would be a lot of bigger tech companies.” They also added that British investors are poor as established company rather than a loss-making tech start-up would give it a healthy valuation.
Those involved in lobbying efforts are also considering bringing UK wealth managers together to help argue the case. Many London fund managers were investors in Arm when it was listed in the UK.
Those involved have made it clear that they are fighting for Arm’s primary listing and not a secondary listing of shares that would exclude Arm from the flagship FTSE 100 index. “The big difference is in the FTSE. Companies like Verizon and Worldpay had ADRs [shares tied to a secondary listing] in London, but it’s not the same.”
A government spokesman declined to comment on individual cases, but said: “We want to make the UK the most attractive place for innovative companies to grow and raise capital.” SoftBank, Arm and the LSE declined to comment.
Additional reporting by James Fontanella-Khan and Anna Gross
Boris Johnson joins last-ditch bid to win Arm listing for London Source link Boris Johnson joins last-ditch bid to win Arm listing for London