China's ByteDance proposes TikTok IPO in bid to woo White House

Andrew Cummings
September 18, 2020

The president said the day before that Silicon Valley tech giant Oracle was "very close" to agreeing to become the "trusted technology provider" to the app, a condition demanded by Washington to assuage fears that TikTok is a national security threat. This comes after he reportedly questioned ByteDance retaining a majority stake in TikTok's USA operations. "Conceptually, I can tell you I don't like that", Trump said.

The board of TikTok Global would include a national security director, who will be approved by the USA and chair a security committee overseeing the protection of user data, according to a person familiar with the matter.

President Trump has previously stated that he would ban TikTok if it wasn't sold to an American company.

ByteDance has also explored divesting a majority stake in the USA business of TikTok, and in July it signed a letter of intent with Microsoft Corp that contemplated the sale of that business to the Redmond, Washington-based company.


Chinese officials have said ByteDance should not be coerced by the United States into a deal.

Mnuchin sent Bytedance a revised terms sheet late Wednesday and the company and Oracle accepted it. People familiar with the matter described the government's changes as addressing national security concerns about the transaction and asked not to be identified because of the sensitivity of the matter.

The global company is expected to file for an IPO in about 12 months, the person said, with plans to be listed on a United States stock exchange. It was also not immediately clear what assets TikTok Global would own beyond the app's assets in the US. President Trump further stated recently that the Treasury could not receive any payment in exchange for the USA signing off on the deal which surprised him.

Initially Microsoft was involved in the talks, now both Walmart and Oracle are in negotiations with ByteDance.


Mr Trump said he would soon be briefed about a proposal that calls for Oracle Corp to become a "trusted technology provider" for TikTok's USA operations, and said he did not favour the idea of having the Chinese firm retain control.

Last month, the Trump administration had issued an executive order calling ByteDance - the parent company - to sell or to completely shut down TikTok's USA business operations, citing national security concerns.

Some analysts said it appeared hard to craft a deal that allays concerns in both countries on security and the algorithms and other key technologies used by TikTok.

Walmart, which was working with Microsoft, said in a statement Sunday it "continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties".


Trump had previously threatened to ban the app unless its U.S. operations were sold to a USA company and the United States government received a share of the proceeds. Reuters reported previous year that CFIUS was investigating TikTok.

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