The Tokyo Stock Exchange reaction to Softbank's acquisition of a world-class British Technology company? A 10% drop in share price.
Looking deeper into the numbers, it's not hard to understand market concerns: Softbank now has debts of $112bn upon paying a 43% premium on ARM's share price and 24.4x revenues in order to secure the company.
This is heady stuff. There is no doubt that the founder of Softbank, Masayoshi Son is a risk taker and a genius - he's the man who acquired a stake in Alibaba for $10m in '00, worth $65bn today - but analysts comment that it's a full price to pay and could well stress the balance sheet.
Also, such a large transaction coming relatively soon after June 23 is inevitably going to be seen in the context of Brexit. Hermann Hauser, Arm’s founder, described the takeover of the company as one of the “sad and unintended consequences” of Brexit. Theresa May describes it as "a clear vote of confidence in Britain."
Stock market gives SoftBank deal a thumbs down
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