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SoftBank and ARM agree on terms of acquisition of ARM by SoftBank

18 July 2016 08:40

The boards of directors of SoftBank and ARM Holdings (ARM) announced they reached agreement on terms of a recommended all cash acquisition of the entire share capital of ARM by SoftBank (or a wholly-owned subsidiary of SoftBank).

Under the terms of the acquisition, each ARM shareholder will be entitled to receive 1,700p in cash for each share.

The price of 1,700p per ARM share represents a premium of approximately 43%to the closing price of 1,189p per ARM share, and approximately 42.9% to the closing price per ARM ADR of $47.08, on 15 July 2016 (being the last business day prior to this announcement).

It also represents approximately 41.1% to the all-time high closing price of 1,205p per ARM share on 16 March 2015.

The consideration values the entire existing issued and to be issued share capital of ARM at approximately £24.3 billion.

ARM Shareholders who are on the register of members of ARM as at close of business on 8 September 2016, or at close of business on the business day prior to the effective date if earlier, will be entitled to receive and retain an interim dividend of 3.78p per ARM share.

This will be paid on 10 October 2016 or, if earlier, the effective date, without any reduction of the offer consideration payable under the acquisition.

In addition, ARM shareholders will also be entitled to receive and retain any future dividends in the ordinary course with a record date prior to the effective date, without any reduction of the offer consideration payable under the acquisition.

In particular, those ARM shareholders who are on the register of members of ARM as at close of business on 20 April 2017 will be entitled to receive and retain the 2016 final dividend for the period to 31 December 2016 of up to 6.76p per ARM share that is expected to be paid on 11 May 2017.

If the effective date occurs before the record date of any ordinary course dividend, ARM shareholders will not be entitled to receive such dividend.

SoftBank intends to:

- Preserve the ARM organisation, including ARM's existing senior management team, brand, partnership-based business model and culture to ensure continuity of a strong track record

- Maintain the headquarters of ARM in Cambridge

- At least double the employee headcount in the UK over the next five years thereby enabling ARM to continue to develop leading-edge technology in the UK

- Increase the headcount of ARM outside the UK over the next five years

The board of ARM, which has been so advised by Goldman Sachs International and Lazard & Co, considers the terms of the acquisition to be fair and reasonable.

Accordingly, the ARM Directors confirm they intend unanimously to recommend that ARM shareholders vote to approve the scheme at the Court Meeting and vote in favour of the resolutions to be proposed at the general meeting.

The cash consideration payable under the acquisition will be funded by SoftBank's existing cash resources and cash drawn down from a term loan facility between SoftBank and Mizuho Bank.

At 8:40am: (LON:ARM) ARM Holdings PLC share price was +512p at 1701p

Story provided by StockMarketWire.com

Related Company: ARM

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