If the deal goes through, it will mean Softbank paying a premium of more than 40% over Friday’s closing rate of the pound at 11.89. Softbank will pay 17 pounds in cash for each ARM Holdings’ shares.
According to a source who is familiar with the matter at hand, Softbank Group Corp is set to buy acquire ARM Holdings PLC, a British chip designer for around $32 billion.
Incidentally, ARM is the most valuable tech company that is listed at the London Stock Exchange. Its CPUs and GPUs have a significant presence in the smartphone market and are used in Huawei, Apple and Samsung smartphones.
While ARM could not be reached outside market hours, Softbank could not be immediately reached for comment.
If the deal were to see the light of day, it would be one of the largest tech deal in Europe to date, outranking Sprint’s $22 billion deal in 2013.
In the last few weeks, Softbank has announced its plans to raise $14 billion by selling shares in Chinese e-commerce giant Alibaba. The move is unusual since Softbank has rarely exited investments. Analysts opine the move could reduce its debts and provide shareholders windfall benefits as Softbank could buy-back its own shares.
This potential deal comes at a time when Britain is set to leave the European Union, a decision that has battered markets worldwide. Though Softbank has warned investors on Brexit’s impact on the revenues for ARM Holdings, the impact could be not so severe as ARM Holdings’ revenues are largely in dollars.
According to a report from the Financial Times, SoftBank is likely to pay 17 pounds in cash for each ARM share, a premium of more than 40% to Friday’s close at 11.89 pounds.
Since today, July 18, is a market holiday in Tokyo, SoftBank’s shares were not traded.
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