UK PM wanted Rishi Sunak’s ambitions to make London the first choice for tech company flotations but appears to have believed he could make that happen with the power of his natural charisma.
Sunak, his predecessor Boris Johnson and an army of government and London Stock Exchange officials had held intermittent talks with SoftBank in an attempt to convince it of the merits of a dual, if not full, listing in London.
While ARM is British it was bought by the Japanese conglomerate SoftBank, who only wants to see it listed in the US.
Arm has previously had a dual listing on both sides of the Atlantic, before it was acquired by the Japanese company for £24.6 billion in 2016, and had been a member of the FTSE for 18 years. Winning it back, after SoftBank decided on a flotation after the blocking of a $40 billion takeover by the US firm Nvidia over competition concerns last year, would have been a huge boost for the capital’s longer-term ambitions to have more tech flotations.
ARM CEO Rene Haas said: “After engagement with the British government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that pursuing a US-only listing of Arm in 2023 is the best path forward for the company and its stakeholders.”
The company promised it would expand its presence with a new site in Bristol and “continued headcount”. “Arm is proud of its British heritage, and continues to work with the British government,” the company said. “We will continue to invest and play a significant role in the British tech ecosystem.”
City analysts said Arm’s decision to choose the US was another blow to London’s attempt to build the tech credentials of the FTSE 100 after the disastrous flotation of Deliveroo and the almost 90 per cent slump in the market value of the online retailer THG.
Interactive investor boss Victoria Scholar said: “There have also been some high-profile disasters in UK tech. Arm’s abandonment of London is another kick in the teeth for the Square Mile’s attractiveness among international investors as a go-to destination for technology giants.”
The government and regulators have made changes to the UK’s listing rules in an effort to persuade fast-growing tech companies that London is a worthwhile place to list their shares.