Softbank Buying Vision Fund's 25% Stake In Arm

SoftBank Group Corp. is in talks to buy a 25% stake in Arm Ltd. it does not directly own from Vision Fund 1, a $100- billion investment fund it raised in 2017, thus delivering a win for investors who have waited years for strong returns, Echo Wang and Anirban Sen reported for Reuters.

Photo Insert: The discussions come as SoftBank, which currently owns 75% of Arm, is preparing to list the chip designer on Nasdaq next month at a valuation ranging from $60 billion to $70 billion.

The discussions come as SoftBank, which currently owns 75% of Arm, is preparing to list the chip designer on Nasdaq next month at a valuation ranging from $60 billion to $70 billion.

If the negotiations lead to a deal, the Japanese tech investor would be delivering a major, immediate windfall to VF1 investors, including Saudi Arabia's Public Investment Fund (PIF) and Abu Dhabi's Mubadala.

They nursed losses after many of SoftBank's bets on startups such as workspace provider WeWork Inc and ride-sharing firm Didi Global soured.

The alternative -- letting VF1 sell its Arm shares in the stock market over time following the initial public offering (IPO) -- would typically take at least one to two years given the size of the stake.

It would also be riskier for the fund's investors since it is possible that Arm's shares could drop following the IPO.

VF1 returned to profitability in the latest quarter as artificial intelligence (AI) boosted the value of startups in which it invested. Previous losses stopped SoftBank from securing outside investors for Vision Fund 2 (VF2), whose $56 billion in capital came from the Japanese firm and its management, including Chief Executive Masayoshi Son.

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