SoftBank Group CEO Masayoshi Son was in San Francisco on Wednesday when he joined a call with his bankers in New York to make a final decision about his company's most valuable asset: chip designer Arm Holdings .
That decision came because SoftBank was concerned that the Vision Fund remaining an investor would weigh on Arm's shares after the IPO, given that it would be seeking to cash out quickly, the sources said.
At the same time, the deal allowed SoftBank, which has previously explored raising a new private equity fund, the chance to boost the Vision Fund's returns, the sources said. Investors including Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala were keen to cash out after nursing losses on many of SoftBank's previous bets that soured, the sources said.
Representatives for Arm, SoftBank, PIF, Mubadala and Raine either declined to comment or did not immediately respond to requests for comment. To stress its long-term commitment to Arm, SoftBank has told investors it will remain a majority owner, and decided against selling more shares beyond the 9.4% stake it was already marketing when the IPO became oversubscribed, the sources said.
SoftBank also told IPO investors that the $64 billion valuation "was established by reference to the terms of a prior contractual arrangement" with the Vision Fund and that it should not be seen as an indication of Arm's true value, according to a regulatory filing. It did not provide details on what the terms of that agreement were.
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