British tech giant Arm Holdings has agreed to a £24.3bn takeover bid by Japanese telecoms group Softbank – and the new owners have big plans for growing the company.
Shares shot up in early trading, then stuck there: shares in the Cambridge-based firm were up 42.6 per cent in late morning trading
[stockChart code="ARM" date="2016-07-26 17:00"]
The companies announced this morning that they had reached agreement on the terms of an all-cash deal, under which each Arm shareholder will receive 1,700p in cash. This represents a premium of around 43 per cent to the stock's 1,189p closing price last Friday.
SoftBank will keep Arm's headquarters in Cambridge, and said it intends to "at least double" the employee headcount in the UK over the next five years.
According to the firms' statement, Arm investors who are on the register of members of the company as of the close of business on 8 September this year will be entitled to an interim dividend of 3.78p per share.
"This is a compelling offer for Arm shareholders, which secures the delivery of future value today and in cash," said Arm chairman Stuart Chambers.
"The board of Arm is reassured that Arm will remain a very significant UK business and will continue to play a key role in the development of new technology. 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.
"Arm is an outstanding company with an exceptional track record of growth. The board believes that by accessing all the resources that SoftBank has to offer, Arm will be able to further accelerate the use of Arm-based technology wherever computing happens."
SoftBank boss Masayoshi Son said: “We have long admired Arm as a world renowned and highly respected technology company that is by some distance the market-leader in its field. 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'.
"This investment also marks our strong commitment to the UK and the competitive advantage provided by the deep pool of science and technology talent in Cambridge."
The Raine Group, Robey Warshaw and Mizuho Securities are acting as financial advisers to SoftBank, while Goldman Sachs International and Lazard & Co, are acting as lead financial advisers to Arm. UBS is acting as financial adviser and joint corporate broker to Arm and Barclays is acting as joint corporate broker to Arm.
Arm recently shelled out £242m for imaging technology company Apical.