Details of the transaction will be unveiled on Monday when
Arm makes public the filing for its blockbuster stock market launch, the
sources said, requesting anonymity as these discussions are confidential.
SoftBank is now expected to sell fewer Arm shares in the
initial public offering (IPO) and would likely be retaining a stake of as much
as 90 percent in the company, according to the sources, adding that Arm's
capital raising from the IPO would be less than the range of $8 billion to $10
billion it was earlier planning.
SoftBank is currently in talks to list Arm at a valuation of
$60 billion to $70 billion in the IPO, which is expected to happen in
September, Reuters has previously reported. SoftBank, which took Arm private
for $32 billion in 2016, sold a 25 percent stake in the company to Vision Fund
1 (VF1) for $8 billion in 2017.
The deal removes a potential overhang for Arm's stock
following the IPO, because VF1 had initially planned to cash out its stake in
the stock market over time following the listing, while SoftBank has indicated
it will remain a long-term strategic investor.
Reuters was first to report earlier in August that SoftBank
was in talks to buy the stake from the Vision Fund. The Wall Street Journal
reported the financial terms of the deal earlier on Friday.
The deal also delivers a major victory for VF1's biggest
investors, including Saudi Arabia's Public Investment Fund and Abu Dhabi's
Mubadala. They nursed losses after many of SoftBank's bets on startups such as
workspace provider WeWork Inc and ride-sharing firm Didi Global soured.
Arm's plans to go public come as the US IPO market shows
early signs of a recovery after a barren spell that lasted a year and a half.
Grocery delivery service Instacart and marketing automation firm Klaviyo are
also expected to go public in New York in September, the sources said. ©
Reuters
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