The top two executives at ARM Holdings will share a payout of up to £55m when the British microchip designer is bought by Japan’s SoftBank, terms of the sale reveal.
SoftBank’s £24bn takeover will allow Simon Segars, ARM’s chief executive, to receive £17 for each of the 668,432 shares he owns, bringing in £11.4m. Mike Muller, the chief technology officer, will be paid £22.7m for the 1.34m shares he and his family own.
The two men will also receive shares granted under ARM’s long-term incentive plan and deferred annual bonus scheme. Those shares are worth up to £13.1m for Segars and £7.2m for Muller, though performance requirements mean the shares are unlikely to pay out in full. Muller was one of ARM’s founders in 1990 and Segars was the company’s 16th employee.
Chris Kennedy, the finance director who joined last September, will get £344,352 for the ARM shares he owns, but is in line for a maximum of £6m from share awards for a year’s work when the deal completes next month.
ARM recommended the takeover, the biggest-ever acquisition of a European technology company, in an offer document sent to shareholders. The UK company’s shareholders are due to meet to approve the takeover, announced last month after just two weeks of talks, at a meeting on 30 August.
To secure the deal, and the approval of the UK government, SoftBank has promised to keep ARM’s headquarters in Cambridge and to double the size of its UK workforce of 1,695 in the next five years. It made the pledges in legally binding undertakings, the first time a company has done so since rules were introduced last year amid concerns about foreign takeovers of UK companies.
The takeover will also be a big payday for investment banks, lawyers and other advisers who will share £118m in fees. SoftBank’s bill for advisers comes to £53m and ARM’s is £65m.
The biggest payments for advice go to the companies’ investment banks. SoftBank will pay £45.2m for financial and corporate broking advice to Mizuho Securities, Raine Group of the US, and the UK boutique Robey Warshaw, which has muscled in on some of the biggest deals of recent years.
SoftBank will also pay up to £110m in fees to Mizuho for a £7.3bn loan to fund the takeover. Including those costs and £121.5m for stamp duty and other fees, the Japanese company’s bill comes in at between £247m and £285m.
ARM is paying £51.2m to its bankers, led by Goldman Sachs and Lazard with UBS and Barclays also involved.
SoftBank is paying £5.5m to its legal advisers, the City firm Freshfields and Morrison Foerster of the US. Rival UK “magic circle” firm Slaughter and May and New York’s Davis Polk & Wardwell will share £9m in fees from ARM.
The other big bills are for public relations advice. Finsbury, which is part of WPP, will share up to £2m of SoftBank’s money with Sard Verbinnen of the US, while Finsbury’s London rival Brunswick will take the full £4m ARM expects to spend on PR.
