ARM Holding

Without doubt the biggest news this week is the purchase of UK chip designer ARM Holdings from Japanese Tech company Softbank.  ARM is a flag bearer of British Technology with its chip design prominent in approximately 95% of smart phones on the market including Apple’s iPhone. News of the sale to foreign owners ‘may’ put a dampener to the new government’s plans for a new “British” industrial strategy for the UK, but even they have warmed to the sale with new chancellor Hammond stating “Britain is open for business”.

For investors and the company itself the offer is fantastic, Softbank are offering £17 a share for the company which is more than a 40% premium for the Cambridge based company. The good news for employees (other than their share options nearly doubling), is that the Japanese firm is committed to retain its HQ in Cambridge and to double its workforce in 5 years.

The share price as you can imagine gravitated towards and above the £17mark instantly yesterday morning when the markets opened, but since then we have seen clients take profit and in turn the stock has fallen to £16.7, effectively leaving 30p on the table. Shareholders will vote on the offer in coming months and we should get a decision by November, but all the vibes are very positive and It looks highly likely this deal will go through with all parties happy. The question now is, with the GBP currency so low will there be a flood of foreign takeovers in the coming months or years?

Good Luck

Vinay

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