Shares in ARM Holdings skyrocketed this week after speculation on the London financial markets that Apple is about to make a bid for the British chip company, which provides the processors for most of the world’s leading smartphones.
The story emerged in the Evening Standard, not usually known as a bastion of tech related articles, which reported “gossip2 in the City that Apple was considering making a move on the chip maker.
The speculation caused shares in ARM to rise 8.1p ($0.12) to 251.1p ($3.86), with more than five million shares changing hands by midday Wednesday. Shares were trading at 257.7p ($3.96) as of 4pm on Thursday afternoon.
“A deal would make a lot of sense for Apple,” said one trader told the newspaper. “That way, they could stop ARM’s technology from ending up in everyone else’s computers and gadgets.” These traders believe a bid would come in at around 400p ($6.15) a share, valuing ARM at more than £5.2 billion (£8 billion).
ARM has made aggressive product developments, and despite Intel pushing its low-power Atom processor hard, nas found a place within the new category of smartbook devices, including machines from HP.
Apple has always made its intention clear that it wants to make its own chips, especially after it acquired PA Semi in April 2008, which specialised in sophisticated but low power chips. Incidentally, PA Semi licensed much of its intellectual property from ARM.
Apple is certainly not short of money and could easily pay a multi billion pound asking price. Apple said recently that it has nearly $42 billion (£27 billion) of cash reserves, but in reality it is not in Apple’s genetic makeup to make huge strategic acquisitions, although some feel that Apple’s enormous cash reserves could well see Steve Jobs embarking on something of a shopping spree.
In the end, Apple usually builds its own technology inhouse, and what it can’t or won’t build, it sources from elsewhere. Apple is a big customer of ARM chips, and therefore already has a close relationship with the company, without having to actually acquire it. Time will tell though.
CEO Andy Jassy tells Amazon staff that the recent 5-day in-office mandate is not meant…
Tech giant Apple could be facing another hefty financial penalty, amid a report the EU…
Victory of Donald Trump in the US Presidential election and the potential implications for the…
Worrying development. Cyberattack on third party supplier disables tracking systems and panic alarms in Serco…
Chinese owner of Scottish fabless semiconductor firm FTDI ordered to sell majority stake, due to…
British competition regulator provisionally finds Vodafone, CMA merger can proceed, if 'remedies' on pricing and…