Shares in ARM Holdings (LON:ARM) have soared in today’s session as Japan’s SoftBank agreed to acquire the FTSE 100 chip maker for about £24.3 billion in cash. The move marks a bet by the Japanese telecoms group on the ‘internet of things’, a term describing a wide variety of devices using sensors and network connections to communicate with one another.
As of 08:50 BST, ARM’s share price had rallied 42.98 percent to stand at 1,700.00p. The shares have gained more than 68 percent over the past year, and are up nearly 65 percent in the year-to-date.
ARM said in a statement this morning that it had reached an agreement with SoftBank on the terms of a recommended acquisition of the entire issued and to be issued share capital of the UK group, for 1,700p per share in cash. The price represents a premium of about 43 percent to the closing price of 1,189p on Friday. The consideration values the UK chip maker at about £24.3 billion.
“ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the ‘Internet of Things’,” SoftBank’s chair and CEO Masayoshi Son commented in the statement, adding that the investment marked the group’s “strong commitment to the UK”.
“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,” the UK group’s chair Stuart Chambers noted. The FTSE 100 group’s business model relies on licensing its technology to other hardware makers such as Apple and Samsung.
Reuters meanwhile quoted the UK’s new Chancellor of the Exchequer Philip Hammond as commenting that the planned purchase showed that the country remained attractive for investment following the Brexit vote.
“Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to international investors,” the Chancellor commented, adding that Softbank’s decision had confirmed that “Britain remains one of the most attractive destinations globally for investors to create jobs and wealth”.