It is reported that ARM may increase the IPO pricing range, and the target valuation will exceed US$54.5 billion

Arm, the chip design company owned by SoftBank Group Corp., is closing in on getting enough investor support to reach the $54.5 billion fully diluted valuation it is seeking in its initial public offering (IPO), and the company is considering asking investors to give it a higher valuation, people familiar with the matter said.

Sources said that due to strong investor demand, Arm’s offering price may reach or exceed the upper limit of its pricing range of $47-51 per share, which would be the largest IPO on the U.S. stock market in two years.

Sources said that given the oversubscription of the IPO, Arm is discussing the possibility of increasing the pricing range and seeking a valuation of more than $54.5 billion. Arm is also considering keeping the pricing range unchanged and pricing Wednesday's IPO above that range, which would also lead to a valuation above $54.5 billion, the sources added.

However, sources said that Arm will not issue more shares because SoftBank hopes to retain its 90.6% stake in Arm after the IPO, which will raise approximately US$5 billion.

Arm will decide in the next two days whether to raise the price range after receiving some key orders from investors on Monday, one of the sources said.