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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% 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% 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 U.S. 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 Inc are also expected to go public in
New York in September, the sources said.
(Reporting by Anirban Sen in New York; Additional reporting by
Milana Vinn in New York and Stephen Nellis in San Francisco;
Editing by Chizu Nomiyama and Mark Potter)
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