SoftBank Group Corp is in talks to acquire the 25% stake in chip designer Arm it does not already directly own from Vision Fund 1 (VF1), a $100 billion investment fund it raised in 2017, according to a report by Reuters.
The report cites unnamed sources familiar with the matter as revealing that the discussions are being held as SoftBank, which currently owns 75% of Arm, is preparing to list the company on Nasdaq next month at a valuation of between $60bn and $70bn.
Should a deal be agreed, VF1 investors including Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala, would see an immediate return having previously suffered losses from SoftBank’s bets on several startups including workspace provider WeWork and ride-sharing firm Didi Global.
VF1 could also sell its Arm shares in the stock market over time following the initial public offering (IPO), but due to the size of the stake, that could typically take one or two years, according to the report. And the eventual investor return could also be lower if Arm’s shares fall post-IPO.
VF1 returned to profitability in the latest quarter thanks to hype around AI boosting the value of some of its start-up imnvestments.
According to Reuters sources, VF1’s investment committee and SoftBank’s investment advisory board, attended by fund investor representatives, are handling the negotiations, although there is no certainty that a deal will agreed.