Shares in Acorn Group Plc rose 8.7% to 217.5 pence after the company transferred its 24.4% stake in ARM Holdings Plc to a new subsidiary called Applied Risc Technologies. The move, right at the end of the tax year, raised hopes that Acorn had found a way to dispose of its ARM shares, currently worth 315m pounds ($513.4m), without incurring massive capital gains tax liabilities.
Some of the finest legal brains in the London financial community have been working on a way for Acorn to capitalize on the soaring price of ARM shares without handing over 100m pounds ($162m) to the government. The most ingenious solution is that ARM Holdings should take over Acorn, cancel the shares, and then spin Acorn back out onto the stock market. The idea has a certain ironic charm, as ARM was originally spun out of Acorn.
