Following the news that the UK government is considering using national security as grounds to force a London IPO for Arm;

David George, Services Director in the Thematic Research Team at GlobalData, offers his view:

“This smacks of utter desperation on the government’s part. It’s unclear whether the suggested use of the National Security and Investment Act (NSIA) would even apply to an IPO. To threaten companies with national security laws when the government is trying to make the UK a more attractive place to list is massively counterproductive. Most companies would run a mile from a country whose government adopts this approach.”

David Bicknell, Principal Analyst in the Thematic Research Team at GlobalData, offers his view:

“The government is now resorting to desperate measures to ensure that Arm remains a UK success story. SoftBank’s sole focus is achieving a successful listing at a targeted valuation of $50 billion. That remains most likely in New York, where semiconductor companies like Qualcomm and others can consider investing in Arm.

“In theory, chipmakers could invest in Arm wherever it listed, even if it was in London. But it’s probably more likely to happen if there’s a listing in New York on the New York Stock Exchange (NYSE) or Nasdaq. There would be more likelihood of buy in from US tech investors for a US-based listing. That would put Arm in the hands of chipmakers, which is right where it should be.

“The best the UK government can hope for is a secondary London listing. But stamping its feet and trying to strongarm SoftBank is the wrong way of going about it.”