Japan’s SoftBank Group has reached agreement with UK-based ARM Holdings on the terms of a recommended all cash acquisition of the entire issued and to be issued share capital of the Cambridge-based microchip designer.
ARM products are used in most smartphones, including those from industry giants Apple and Samsung.
Under the terms of the acquisition, each ARM shareholder will be entitled to receive for each ARM share 1,700 pence in cash, which represents a premium of approximately 43.0 per cent to the closing price of 1,189 pence per ARM share, and approximately 42.9 per cent to the closing price per ARM ADR of USD47.08, on 15 July 2016.
The consideration values the entire existing issued and to be issued share capital of ARM at approximately GBP24.3 billion.
In addition, ARM shareholders who are on the register of members of ARM as at close of business on 8 September 2016, or at close of business on the business day prior to the effective date if earlier, will be entitled to receive and retain an interim dividend of 3.78 pence per ARM share, which dividend will be paid on 10 October 2016 or, if earlier, the effective date without any reduction of the offer consideration payable under the acquisition.
ARM shareholders will also be entitled to receive and retain any future dividends in the ordinary course with a record date prior to the effective date, without any reduction of the offer consideration payable under the acquisition.
ARM shareholders who are on the register of members of ARM as at close of business on 20 April 2017 (the record date for the 2016 final dividend) will be entitled to receive and retain the 2016 final dividend for the period to 31 December 2016 of up to 6.76 pence per ARM share that is expected to be paid on 11 May 2017. If the effective date occurs before the record date of any ordinary course dividend, ARM shareholders will not be entitled to receive such dividend.
If, after the date of this announcement, any dividend and/or other distribution and/or other return of capital (other than the dividend and any ordinary course dividends) is announced, declared or paid in respect of the ARM shares, SoftBank reserves the right to reduce the offer consideration by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared or paid.
SoftBank says it intends to preserve the ARM organisation, including ARM’s existing senior management team, brand, partnership-based business model and culture to ensure continuity of a strong track record; maintain the company’s Cambridge HQ; at least double the employee headcount in the UK over the next five years thereby enabling ARM to continue to develop leading-edge technology in the UK; and increase the headcount of ARM outside the UK over the next five years.
It is intended that the acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
Stuart Chambers, chairman of ARM, says: “It is the view of the board that this is a compelling offer for ARM shareholders, which secures the delivery of future value today and in cash. The board of ARM is reassured that ARM will remain a very significant UK business and will continue to play a key role in the development of new technology.
“SoftBank has given assurances that it will invest considerably in the business, including doubling the UK headcount over the next five years and maintaining ARM's unique culture and business model. ARM is an outstanding company with an exceptional track record of growth. The board believes that by accessing all the resources that SoftBank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens.”
