ARM Shares Surge On £24.3 Bln Offer By Japan's SoftBank

(RTTNews) - Shares of ARM Holdings plc (ARMH, ARM.L) were gaining around 46 percent in the early morning trading in London, after the British chipmaker announced Monday its agreement to be acquired by Japan's SoftBank Group Corp. (SFTBF.PK), in a deal worth 24.3 billion pounds or around $31 billion.

Under the terms of the recommended all cash acquisition, ARM Shareholders will be entitled to receive 1,700 pence in cash for each ARM Share.

The per share price represents a premium of approximately 43.0 percent to the closing price of 1,189 pence per ARM Share, and approximately 42.9 per cent to the closing price per ARM ADR of $47.08, on July 15, being the last business day prior to the announcement.

The price also represents a premium of approximately 41.1 percent to the all-time high closing price of 1,205 pence per ARM Share on March 16.

In addition, ARM Shareholders, as per register on particular dates, will be entitled to receive an interim dividend of 3.78 pence per ARM Share, as well as final dividend of up to 6.76 pence per ARM Share.

ARM Directors consider the acquisition terms to be fair and reasonable, and intend unanimously to recommend that its shareholders vote to approve the deal. The acquisition is not subject to any anti-trust or regulatory conditions.

The companies said the acquisition would be implemented by way of a Court-sanctioned scheme of arrangement, which will become effective as soon as practicable in third quarter, 2016.

Following the deal, SoftBank will preserve the ARM organisation, including its existing senior management team. ARM will remain an independent business within SoftBank, and its headquarters will be maintained at Cambridge. SoftBank will at least double the employee headcount in the UK over the next five years. It will also increase the headcount of ARM outside the UK over the next five years.

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

Masayoshi Son, Chairman and CEO of SoftBank said, "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."

In the deal, the Raine Group, Robey Warshaw LLP and Mizuho Securities Co., Ltd. are acting as financial advisers to SoftBank. Goldman Sachs International and Lazard & Co., Limited are acting as lead financial advisers to ARM.

In London, ARM shares were trading at 1,740 pence, up 46.34 percent.

In Tokyo, SoftBank shares settled at 6,007 Japanese yen today, up 0.23 percent.