Backlash over plot to bend City rules in bid to woo Arm back to London
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Backlash over plot to bend city rules in an attempt to lure microchip maker Arm back to the London market
Plans to water down city rules to bring Arm Holdings back into the London market have met with backlash.
The Institute of Directors (IoD) said there was a “real danger” in trying to rewrite the rulebook to lure specific companies like the chipmaker.
UK officials are engaged in last-ditch talks to bring Arm back to the UK in a float the company is expected to value at around £50bn.
Setting precedents: The Institute of Directors said there was a ‘real danger’ in trying to rewrite the rulebook to lure specific companies, such as the chipmaker Arm
The Cambridge-based company, the world’s leading specialist designer, announced its latest quarterly revenue of £620 million yesterday, up 28 per cent on last year, as well as underlying profit of £374 million.
It said preparations for the initial public offering (IPO) were “advanced” and that it “remains fully committed to listing in calendar 2023,” but did not provide further details on the location or timing of the IPO.
But some in the City fear regulators are preparing to relax established stock exchange rules to lure Arm to London.
Roger Barker, director of policy and corporate governance at the IoD, said: ‘UK regulators are showing a worrying willingness to rewrite the list rulebook to lure business to London.
There is a real danger in weakening established governance rules to win deals. It undermines the integrity of both the rules themselves and the wider UK governance framework.
In the long term, good corporate governance benefits most from the consistent and fair application of prudent listing rules that protect investors and other stakeholders.
“The UK must not jeopardize its hard-won reputation for high governance standards by engaging in a regulatory race to the bottom.”
But a City source described the reported plans to water down the rules as “pretty weak beer.”
Arm, whose chips power the global smartphone industry, was listed in London before being bought by Japan’s Softbank in 2016 for £24 billion.
A plan to sell it to US-based Nvidia fell through under regulatory scrutiny, prompting plans to return it to the public markets, with New York initially seen as a pole position for the listing.