ARM is organising a share buyback, through the imaginative device of acquiring its former parent company Acorn. After the agreed acquisition, Acorn effectively no longer exists. The company is selling off one operating business -- the set-top box business to Pace Micro Technology and its second operating business -- the DSP design business to managers. (Do they still want to call this business Element 14 (http://www.theregister.co.uk/content/archive/2004.html) ?). In January, Acorn sold its half share in Xemplar (http://www.theregister.co.uk/content/archive/2231.html), the education dealership, to fellow shareholder Apple for £3 million. Presumably there is still some cash in the Acorn business and this will stay with the management. But who will retain rights -- and the royalty cheques -- for the Acorn RISC OS (http://www.theregister.co.uk/content/archive/3072.html)? Acorn currently holds a 15 per cent stake in RISC OS Ltd, a company set up by die-hard Acorn dealers, developers and enthusiasts, to peddle Risc OS4, the long awaited upgrade for the Acorn platform. Costing £120, Risc OS is available for advance orders from this week. Tidying up ARM’s acquisition represent a neat tidying up exercise, for which advisers Close Brothers deserve a fat fee. Acorn currently holds 24.2 per cent of ARM, but financial constraints mean that a: it could never be anything more than a very passive shareholder and b: a predator could tunnel into ARM through Acorn. ARM is offering two ARM shares for every five Acorn shares, valuing Acorn at £269.8 million or 279p. This is a 14 per cent premium over Acorn’s closing price yesterday and a premium of 35.7 per cent to the average discount of "15.8 per cent. at which Acorn Ordinary Shares have traded to the post-tax value per share of Acorn's investment in ARM Holdings over the six months prior to the date of this announcement". So the patience of long-suffering Acorn shareholders, and arrivistes who were looking for a cheap way into ARM, a relatively illiquid stock, will get their reward by directly owning ARM shares. Acorn downturn Almost incidentally, Acorn announced its results today. The headline figure of £11.1 million pre-tax profit for the year to 31 December,1998 (1997: £2.9 million) is altogether less impressive, when the company’s one-off profits of £18.1 million on the sale of ARM shares are taken into account. Acorn’s withdrawal from its own Acorn platform hardware business is reflected in sales that tumbled in half to £11.5 million for the year. The operating loss tripled to a spectacular £9.9 million. ® ARM revenues show huge boost (http://www.theregister.co.uk/content/archive/3785.html) Wise men save Acorn PC (http://www.theregister.co.uk/content/archive/743.html)