Exclusive-SoftBank in talks to buy Vision Fund's 25% stake in Arm -sources
By Echo Wang and Anirban Sen
NEW YORK (Reuters) — SoftBank Group Corp is in talks to acquire the 25% stake in Arm Ltd it does not directly own from Vision Fund 1 (VF1), a $100 billion investment fund it raised in 2017, according to people familiar with the matter, potentially delivering a win for investors who have waited years for strong returns.
The discussions come as Softbank (OTC:SFTBY) is preparing to list the chip designer on Nasdaq next month at a valuation of $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 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 more risky 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 thanks to investors' excitement around artificial intelligence boosting the value of some of the startups in which it invested. Yet its previous losses prevented 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.
A big windfall for VF1 investors could boost SoftBank's chances of tapping them for capital again in the future. It has been considering raising a third Vision Fund.
Son, who has
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