SoftBank Group Corp. is reportedly exploring the possibility of selling or publicly listing the British semiconductor designer Arm Holdings Plc, which it acquired for $32 billion in 2016.

The report today from The Wall Street Journal cites “people familiar with the matter” as saying that the review is still at an early stage, and that it isn’t known how much interest there might be in Arm, which designs the vast majority of computer processor chips used in mobile devices.

The Journal notes that SoftBank has long intended to return Arm to public markets at some stage. However, those plans could be accelerated as SoftBank is coming under pressure from the activist investor Elliott Management Corp., which has reportedly taken a $3 billion stake in Arm’s parent company and is agitating for changes following the poor performance of some of its investments.

SoftBank is best known for its Vision Fund, which is the world’s largest technology-focused venture capital fund, armed with more than $100 billion in capital. But the fund has performed poorly following a series of questionable investments and in May reported an $18 billion loss. The Journal said those losses have undermined SoftBank’s plans to raise a second big investment vehicle.

In response, SoftBank is reportedly planning to sell up to $41 billion in assets in order to buy back its own shares, the Journal said. SoftBank has plenty of assets to choose from. In addition to Arm, it also owns a large stake in China’s Alibaba Group Holding Ltd., for example.

Elliott has a long history of agitating for change at the companies it invests in, as it has done at AT&T Inc., eBay Inc. and Marathon Petroleum Corp. Elliott was also one of the main instigators of Dell Technologies Inc.’s massive $67 billion acquisition of EMC Corp. in 2017.

When SoftBank bought Arm in 2016, Chief Executive Officer Masayoshi Son said the acquisition would enable it to become a major player in the “internet of things,” which refers to networks of connected devices. But Arm has struggled to make much of an impact in IoT, and last week said it was planning to spin off two related business units as separate companies so it could focus solely on its computer chip business. That transfer is expected to be finalized by September.

Arm’s main business could still be a good money spinner for SoftBank, though. The company recently achieved a major victory when it was announced that Apple Inc. is planning to transition from Intel Corp. x86-based chips in its Mac computers to its own processor based on Arm’s designs.

Arm is also gaining traction in the data center with Amazon Web Services Inc.’s launch of its Arm-based Graviton2 processor. Meanwhile, SiliconANGLE’s sister market research firm Wikibon forecasts a bright future for the company in the enterprise, saying that it expects Arm-based processors to power 72% of new enterprise servers by the end of this decade.

Analyst Charles King of Pund-IT Inc. told SiliconANGLE that in light of Arm’s recent deal with Apple, now is probably a good time for SoftBank to sell or list it.

“Arm has a higher and overall more positive profile today than it has had in some time,” King said. “That good news has overshadowed some of the less than happy stories about IoT growth being considerably softer than anticipated. If SoftBank wants to capitalize on an investment that’s generally liked and respected, doing so sooner than later would probably be wise.”

Constellation Research Inc.’s Holger Mueller agreed that Arm was a good potential money spinner for SoftBank because it’s the most hardware-oriented company within its portfolio.

“If SoftBank wants some synergies between its investments, it makes most sense to de-invest Arm,” Mueller said. “Doing so would provide SoftBank with a chunk of change that will eliminate the need to make more difficult decisions.”

Photo: Kārlis Dambrāns/Flickr