According to an updated filing made on Tuesday, Arm will price its initial public offer between $47 and $50 per share. This could raise up to $4.9bn in revenue for its owner SoftBank, and value the UK-based designer of chips at up to $52bn.
The company announced that cornerstone investors such as Apple, Google Nvidia Samsung Intel and TSMC have expressed their intention to buy up to $735mn of arm at the IPO rate.
In the filing on Tuesday, Apple and Arm also announced that they had signed a “long-term contract” which ensures that Apple will be able develop processors using Arm’s designs beyond 2040. Apple has been a long-time customer of Arm after helping to found the company in 1990 as part of a joint enterprise.
SoftBank acquired Arm for $32bn in 2016, but its new target is , which is below the $64bn valuation that was implied in a deal less than a week ago with its Vision Fund. The Japanese conglomerate oversees a $100bn Saudi investment vehicle.
SoftBank still owns 90.6 percent of the company after the IPO. This is expected to take place next week. On Tuesday, the companies will start their roadshow to pitch this float to investors, which is expected to be among the biggest of this year.
The 10 cornerstone investors were announced for the first-time on Tuesday. They include chipmakers AMD, MediaTek and Cadence, both of which offer tools for chip design.
Qualcomm, one the largest mobile chipmakers in the world and an important Arm client, was not included among the strategic supporters, despite the fact that the two companies were involved in a legal battle regarding intellectual property licensing.
Before the publication of the price range on Tuesday, some fund managers had expressed scepticism about SoftBank’s ability to convince investors to pay up to $50bn for a firm that reported flat revenue and declining profits in the lead-up to its IPO.
James Anderson, one of Britain’s best-known tech investor said that Arm has “missed a lot” of opportunities since SoftBank’s acquisition, including faster growth in cloud computing. He said that despite Arm’s strong position in the smartphone industry, it could be “more difficult than they thought” for them to reach their desired valuation.
Anderson said that it is not clear whether Arm is a key player in the majority of areas of expansion. “I don’t see it having a special area of strength when it comes to AI-type development.”
Barclays Goldman Sachs JPMorgan Chase Mizuho lead a consortium of 28 investors for the IPO. Raine Group, a boutique investment firm with SoftBank ties and Jeffrey Sine as its co-founder on Arm’s Board of Directors, is the lead adviser for this deal.