SundayTrader
19 Jul 2016
Re: Arguments against takeover I don't know about anyone else, but I think the price is too low. So what if the exit P/E ratio is way over 100 - ARM has always been on a pretty high ratio. It is not that great a premium. This is a unique company, with a quality of earnings and of future potential which can't be matched anywhere. As far as the future of the company is concerned, if the management are able to make use of additional funds I would have thought that current shareholders would be supportive.Never mind whether the country will be better or worse off with ARM under foreign ownership. The value question is whether shareholders are being well served at this price.Maybe I am just being lazy - I really don't want the hard work of finding another company of the same quality in which to put the funds.
Bertie Biddle
19 Jul 2016
Re: decided to sell half... Eadwig "I know that you have such a low opinion of Britain that you believe all its world leading companies should be run by foreigners, even Australians, apparently, whose points system you admire so much and which has catapulted them to the top of the global tech design tables ... oh, hang on a minute ..."You have the wrong bloke there Eariwig? I have a very high opinion of Britain and its workforce but unlike you I am a free trader and think that we should be free to trade in companies as well as goods.In Aims case they were probably in need of further investment and diversification if they were to grow further as a company. At the moment they are like the technical brains department behind some very big and competing electronic hardware giants.If a company borrows from a foreign bank they can end up being effectively owned by them. Far better to have a foreign investor having a vested interest in a company or even owning it.It is important to keep all these hardware giants in place and to a large extent ARM (sorry about the previous AIM faux pas) has all its eggs in one collective basket. It is a pooling of minds that needs to be kept in place if the cash cows are to continue to provide.Softbank should not spoil the existing relationships and will provide the investment required for the R&D required in the future. They are talking billions here and if someone comes along and offers you those billions, has the same views on future technology and will not only keep the same management and HQ in the same place but double the existing workforce then, if only in the interest of existing shareholders, you snap their hand off."Even the Times editorial today warns that we cannot keep selling off our leading companies and expect to compete out on our own in future."In terms of income and technology then yes they are the leading UK company but in terms of employment they are not. Less than half of the existing employees of 4,000 are currently employed in the UK which the new parent company has promised to double in the next five years.They have not decided that for themselves but it will be what the existing management will have told then they envisage they will need for what they intend to do. They will not have any problem to recruit the graduates they will need whatever their nationality. Any software engineer is going to jump at the chance to work for a world leader with an exciting future.The ownership of the company is immaterial and that ownership may be up for grabs in the future. If it in the national interest for any reason to retain British ownership of a company then that is for governments to decide. For example well over $500 billion is invested by UK companies in the USA and vica versa. Reciprocal investment must be encouraged for the good of the country and not prevented.You have consistently argued that FTA's can take several years to negotiate but those already in place with the EU can simply be transferred with little modification. Your arguments are based on negotiations of FTA's with the EU which must satisfy 28 countries. It is much easier with only two countries on the agreement and historically do not take several years to conclude. When Australia and NZ say they would like a urgent agreement that are not talking several years.You continue to ignore the fact that the majority of world trade is done between countries who have no FTA in place as is the case now with trade between the EU and the rest of the world. The new potential boss of ARM said that Brexit in or out would have made absolutely no difference to his decision to acquire that company."Like you've missed the level of the FTSE 250 since the Brexit vote"No I haven't missed the drop in the 250 which was entirely to be expected. Nobody in his right mind can predict markets but you can have a view what could happen and a drop in the 250 was predicted. We discussed on the BP board what might happ
axolotl
19 Jul 2016
Re: Reflections as the old saying goes, "From lttle acorns big arms grow"
Rhigos
19 Jul 2016
Re: Reflections Le Grand Meaulnes, "I fondly remember my RiscPC and the excitement of the StrongARM board, etc."Me to. My 1st computer was an Acorn BBC B and I still have a StrongArm RiscPC in a cupboard. The most reliable PC I've ever owned.There was an interview with Hermann Hauser - founder of ARM on TV last night. He expressed his dismay that the UK is losing the intellectual rights to ARM processors, that are now found in such a multitude of products. Britain's last heavy weight tech company sold to a foreign company for them to reap future rewards.
Le Grand Meaulnes
19 Jul 2016
Reflections Gosh, well here we are. I think it's almost 20 years since I first bought shares in Acorn (which later became ARM shares), and almost as many since I started posting to this board. There have been ups and downs, lots of posts, and I've bought and sold (oh, if only I'd forgotten about the shares till today!). (Still, at least I did recently buy more ARM as a hedge on Brexit, given the income in $, costs in £ nature of the business. So happy about that!).I'm not hugely keen on the takeover - as others have said, I think long term I'd do better out of holding on to ARM, which in 10 years time will have increased in value hugely.The only bonus - which is less mentioned - is that if I get a 50% premium now, I can invest that in something else, which may mean this is as good in the long run as holding the shares. Though what that something else is, I've currently no idea. I doubt I'll find another 20 year long term hold like this one (I've held some ARM shares throughout those 20 years, just not as many as I first bought).I guess like others I have to admit to both a financial and more emotional reason for holding ARM - not to mention the emotional side of having done so well from ARM financially. I fondly remember my RiscPC and the excitement of the StrongARM board, etc.Those were the days....
Le Grand Meaulnes
19 Jul 2016
Re: what to do? Sell or hold? If the sale goes ahead, unless I'm much mistaken, you'll just get your cash - you won't be able to hold the shares. There is a risk it won't go ahead, in which case you'll have shares worth rather less than they are today. If there's another bid, you may get more, of course.
Telecom Spiritualist
19 Jul 2016
Re: Offer Price? The reason for the difference is the (small) risk that the deal will not go through, and the shares drop back down to the £10 mark.Also we still don't have a completion date for the deal. It could be a long time before we actually see the £17.
Eadwig
19 Jul 2016
Offer Price? If the offer price is 1700p, how come today's price is 1673p as I type. Even with stamp duty there's room to make money there, especially if you fancy taking a punt on there being a chance of a competing bid.Or have I misunderstood the offer price?If a Chinese or Russian state run company were to make a counter-offer, I wonder if the politicians would still be saying what a good deal this is for UK PLC - if indeed they have been saying that, I got the impression Theresa May had given her endorsement, but only from a second hand source, and only an impression.Or is this people taking profit now and the market just reacting in the way markets do?
Eadwig
19 Jul 2016
Re: Sad day for UK industry Mr google, "the purchase was made using debt which can make the deal risky if they face difficulties in the future"Its pretty depressing just how easy it is for companies from another country to takeover our iconic brands let alone strategically important companies with 100% leverage. Manchester United being one of the more easy to understand examples (not that I'd ever admit to Man U being an iconic brand in any other forum).When the situation is reversed, UK companies always seem to run into regulatory difficulties. Even within the EU, Eg. Vodafone and Mannesmann in Germany, a deal that took so long to complete it killed VOD off as a growth story - and gave Deutsche Telecom time to catch up too, come to think of it.
Eadwig
19 Jul 2016
Re: decided to sell half... Bertie Dribble,You have a very short and selective memory, but I'm not going to engage with you at length on the ARM board, it would be futile, especially as you appear to think this was a deal done on the small cap AIM market and not UK PLC losing a world leader in its extremely important field.I know that you have such a low opinion of Britain that you believe all its world leading companies should be run by foreigners, even Australians, apparently, whose points system you admire so much and which has catapulted them to the top of the global tech design tables ... oh, hang on a minute ....Even the Times editorial today warns that we cannot keep selling off our leading companies and expect to compete out on our own in future.If you think I was wrong about FTA's taking years - just listen to what those politicians in charge of 'Brexit' are now saying. If you think I was wrong about the low-ball cost I put on negotiating those deals - just wait for the emergency budget to set the budgets for the new departments being set-up to negotiate these arrangements. That's if we have an emergency budget. It may be that we stick to the standard parliamentary timetable, so as to buy us some more of the time required. Or have you missed all that? Like you've missed the level of the FTSE 250 since the Brexit vote, a much more accurate reflection of the UK economy and what the markets think of their potential future, and the predictions for UK GDP growth over the next 2 years? Any time you want to come back and admit my predictions were actually correct, and your predictions like Johnson or Gove being the next PM were wrong, as I did in fact point out to you, then feel free.
Eadwig
19 Jul 2016
Re: decided to sell half... johnymccarthy, "Could it be that you are also wrong about something else?"Almost certainly Johny, on many things. But not about this country needing immigration for its future skills and to maintain the state pension, which I suspect is what you are talking about.Even if there is a remarkable turn around in birth rate in the UK starting today, we're still going to need immigration to up that current ratio of 3 workers paying for each pensioner (and rapidly falling, at a time when the UK has more people in work than ever before), plus everything else their taxes have to pay for, between now and when those new babies come onto the job market.Not that I can take any real credit for being right about that. It is what the Office of National Statistics say and successive governments for the last 20 odd years. They may not put it quite as bluntly as I do, but I think you might be as surprised as I was, given what a hot subject it was in the referendum debate, that the UK has the easiest criteria to become a citizen than any other country in the EU. (Don't confuse being a UK citizen with being a British subject, like most people do, There were 7 different levels of British citizenship last time I checked, besides being a British subject). Those easy criteria are no accident. There would have been nothing easier over the last 12 years or more for any government of whatever stripe to get support for making those criteria tougher. In most measurable ways (like length of time before becoming a naturalised citizen) they could have doubled the requirements and STILL been the one of the easiest countries to gain citizenship within the EU.If you think I'm wrong, ask yourself why the above wasn't done.There are other ways to solve the problem. Removing the ridiculously unaffordable 'triple lock' on the state pension, reducing the level of pension currently paid and upping the retirement age further than 68 - which I believe should have been done when the pension ages were first shifted. Why? Because the longer politicians put that off, the more immigration we need, and how many politicians are going to get a mandate in future to make the changes needed to the pension level - or will even dare to try?The only other way I can think of involves euthanasia, in one form or another, and I suspect even most Brexiteers draw the line somewhere. If you weren't referring to that discussion (but I honestly can't remember speaking with you before on anything else) then please feel free to point out where else you think I was wrong. If it was some sort of investment recommendation I made over the last 18 months or so, then almost certainly I was wrong..... I only generally post them up so people who know me can go the opposite way with their money.
JRz
18 Jul 2016
Re: decided to sell half... the way, IPs being generated since its formation will be owned by the new owner should the takeover comes in action.
JRz
18 Jul 2016
Re: decided to sell half... Oh dear some people in this BB do not understand technology development. As the founder of ARM stated Mr Hauser said the result of the Softbank deal meant the "determination of what comes next for technology will not be decided in Britain any more, but in Japan". So we can have the money and the dividend for now, but there won't be left over afterward. So we had CSR, Autonomy and now ARM. Afterward...
Mr Google
18 Jul 2016
Re: Sad day for UK industry I doubt it, but the purchase was made using debt which can make the deal risky if they face difficulties in the future where they might be forced to divest assets to pay debt.
Rhigos
18 Jul 2016
Re: where's Rhodey Vigi,I agree about internet of things and great future for ARM as an independent or fully owned subsidiary.I liked II Editor article which states ARM has been speculated to be a bid target for some time. I too am holding for any counter bids.More as a protest than anything else I have instructed by broker that I wish to vote against accepting SoftBank offer for the shares I hold in an ISA. Wish I held ARM shares in my normal account then I could sell some dogs to offset the CGT ;-/Rhigos.
