💪 Morrison Foerster flexes its Arm
In today’s email:
This year’s biggest IPO
Asset sale or share sale?
Some bakers get blocked
What colour is the word ‘nine’?
Create music with randoms online
Burger King’s lying about its Whoppers
Bitcoin’s closer to listing on the stock market
Split your law firm application into baby steps
The EU’s Digital Services Act should scare tech companies
… and more!
EDITOR’S RAMBLE 🗣
After last week’s newsletter about Heineken’s asset sale, a bunch of you reached out to ask about the difference between share sales and asset sales.
So, I thought we could get into it in this week’s Ramble!
What’s a share sale? This is when a buyer acquires all the shares of a target company, effectively taking over the entire company and stepping into the shoes of the previous owner. In doing this, they’ll own all of the company’s assets (what it owns) and liabilities (what it owes). The identity of the company remains the same, but the ownership changes.
What’s an asset sale? In an asset sale, a buyer acquires specific assets of the target company (for example, a factory). The seller retains the ownership of their company, but without the assets that have been sold.
I hope that was helpful!
P.S. Thanks for those of you who applied for the brand ambassador roles. I’ll reach out with an update soon (here’s the link to anyone who wants to apply — it’s only open to a few select unis for now while I test it out)
FEATURED REPORT 📰
💪 Morrison Foerster flexes its Arm
What’s going on here?
Arm, a British computer chip company, is reaching for a valuation of around $50bn (£40bn) in its upcoming public share sale.
What does this mean?
The market for initial public offerings (IPOs) has been quiet recently — so Arm’s share sale is BIG news.
Arm’s a massive company in tech hardware — the device you’re reading this on probably contains one of their chips.
That’s why this IPO is expected to be one of the biggest of the year.
What’s an IPO?
An IPO is when a company sells a portion of its shares to the public.
Companies do it to raise money, often for expansion, investments, or to reduce debt.
In this case, the Japanese investment giant SoftBank (the company that owns Arm) is using this IPO to recoup some of its investment in Arm.
It had previously planned to sell Arm to Nvidia (an American tech hardware company), but this was blocked by competition regulators.
How much money is Softbank going to get?
It’s hoping to raise around $5bn in the listing in the US.
The UK government tried, but failed, to convince them to list in the UK (and yes, we did a newsletter on that).
The sale is only for a portion of the shares in Arm (95,500,000 shares, to be exact). If those shares sell for between $47 and $51 each, it’ll give Arm, as a whole, a valuation of around $50bn.
Softbank will continue to own 90% of the company's shares after the share sale.
It’s reported that Apple, Google and Nvidia have already committed to buy about $735m worth.
Just US law firms, pretty much:
🏢 Arm is represented by Morrison Foerster
🏢 SoftBank is being advised by Sullivan & Cromwell
🏢 The lead underwriters (including Barclays Capital, Goldman Sachs, J.P. Morgan) are represented by Davis Polk.
Underwriter?… erm, what’s that?
Underwriters make sure the IPO goes well.
They do this by:
🔍️ evaluating the risks associated with the IPO,
🧮 determining the number of shares to sell and the offering price, and
🗣️ promoting the IPO to potential investors.
If the shares don’t get sold, the underwriters will buy them at the offer price, so the IPO will never end up failing.
Why should law firms care?
🇺🇸 A win for the Americans: As Arm chose to list its shares in the US, and not the UK, all the law firms involved are from the US (although some London lawyers from Morrison Foerster are advising too).
So, if the preference for US listings continues, UK firms might start to get worried as they’ll lose out on work (and IPO advisory work brings in big money). US lawyers will inevitably have more familiarity with the requirements for public offerings over there.
🍔 A measure of market appetite: The IPO market has been a bit dead recently — but this offering might shock it back into life.
Law firms will be looking at how well Arm’s shares sell as a test for the market’s IPO appetite.
If investors are hungry again for new listings, other companies will notice. They’ll be more keen to do an IPO of their own which will mean more work for corporate lawyers!
TOGETHER WITH PATENT DROP* 🤝
Future IP lawyers — read this.
The team at Patent Drop scours through 100+ patents each week to discover the future of innovative tech.
Then, they package it all up into a no-cost newsletter.
Patent Drop looks at innovations like Microsoft’s “sustainability-aware” behaviour management system and Ford’s robot-assisted package delivery — and explains what these actually mean.
* This is sponsored content
A BIT OF FUN 😄
✨Trainees, make sure your supervisor knows this 👇️
IN OTHER NEWS 🗞
🌐 The EU's Digital Services Act (DSA) is set to shake things up for major online platforms, and it’s being rolled out right now. The DSA is all about accountability for digital services operating in the EU, covering everything from fake news to harmful content. The Act means the big players (like Facebook, X (previously Twitter), Google, TikTok…) will be hit with HUGE fines of up to 6% of their global revenue if they don’t comply.
🥐 Cerelia, known for its bake-at-home goodies, wanted to acquire fellow pastry maker Jus-Rol. But the UK’s Competition and Markets Authority (CMA) was having none of it, and blocked the deal. Cerelia tried to appeal, but the tribunal stuck with the CMA's decision. Now, Cerelia has to sell off Jus-Rol entirely.
🇺🇸 A US court rules that the SEC (a financial regulator) was unjust in denying a crypto firm its bid to convert its Bitcoin trust into an ETF. A Bitcoin ETF will make it easier to invest in Bitcoin through an established stock market — so it’d make investing in Bitcoin way easier (and presumably more popular). Following the verdict, Bitcoin's price jumped 7.15% to a notable $27,851.82. The decision might just pave the way for other pending US Bitcoin ETF applications, a move that many industry enthusiasts have been eagerly waiting for.
🛍️ UK clothing retailer NEXT (guided by Slaughter and May) is set to further increase its stake in the fashion house Reiss by buying an additional 34% stake for £128m. Once completed, NEXT's interest in Reiss will jump from 51% to 72%. The deal, set to close in mid-October, means Reiss's financials will merge into NEXT's accounts.
🍔 Burger King have been accused of faking the size of their Whoppers. The fast-food chain tried to get a lawsuit dismissed, which accused them of making their Whoppers seem bigger in ads than they actually are. However, the judge wasn’t having it! (remember Taco Bell facing the same claim?)
AROUND THE WEB 🌐
🎵 Fun: Create epic live music together with strangers on the internet in real-time.
🌈 Cool: Choose what colour you most associate with specific words and see if others around the world agree.
STUFF THAT MIGHT HELP YOU 👌
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