China’s proposed bytadance is planning an initial public offering from American company Tickcock Global, the new company that will operate the popular short video app, its proposed deal should be approved by the US government, people familiar with the matter said on Thursday.
Bytdance is in the running to strike an agreement with the White House that would overturn the US ban on Tiktok that President Donald Trump has threatened could happen early next week.
Trump last month ordered ByteDance to tell Tiktok, among U.S. concerns, that personal data of 100 million Americans using the app could be passed to China’s Communist Party government. On Wednesday, he reiterated that he maintained majority ownership of Tiktok in opposition to ByteDance.
The White House and ByteDans have agreed to a term sheet on some aspects of a deal, although Trump has yet to approve it, one of the sources said. The source said that Top Bytes would hold at least a 60% stake in the US operations of American investors, Oracle Corp and potential Walmart Inc. Tickcock.
The source said the new company, dubbed TickTock Global, would have a majority of US directors, US CEOs and a security expert on the board. According to the source, Oracle has finally agreed to a 20% stake in the company. If Walmart successfully negotiates to acquire a stake, its CEO Doug McMillan will get a seat on Ticketok Global’s board, the source said.
There is no certainty as to whether Trump will sign the agreement. It was also not immediately clear what Ticktock Global’s assets would be next to the app’s assets in the United States. Bytdance has offered to create 25,000 new American jobs in Tiktok, with headquarters in the United States as it seeks to win blessings for a deal with Trump, Reuters has reported.
It was also unclear whether ByteDance could offer the deal to China as a majority ownership of Tickcock. Chinese officials have said they do not want ByteDance to agree to a forcible sale, and the company’s proposal to the White House this week called for Tiktok to retain majority ownership.
An IPO from TikTok will be one of the biggest stock market debuts in the technology sector, given that the app was recently valued at more than $ 50 billion by ByteDance investors. It will further reduce ByteDance’s stake in the company to appeal to US officials, who want to see the Chinese firm loosen its grip on the video app.
Sources said the filing of the IPO would be on the US Stock Exchange and could come in about a year.
Ticketok Global’s board will consist of a national security director who will be approved by the US and will chair a security committee overseeing the security of user data, according to a person familiar with the case.
The term sheet will give Oracle the right to inspect TikTok’s source code and include a number of provisions to ensure data security and requirements that all US users’ data remains in the United States, held by Oracle.
It is unclear what Oracle or Walmart will pay for a stake. Oracle, Walmart and Treasury did not immediately comment.
White House Chief of Staff Mark Meadows said Thursday that the administration is still looking into details of the deal and whether it meets the national security threshold. Meadows said that if Ticketok remains primarily Chinese-driven under the Oracle deal, it would not serve President Donald Trump’s objectives.
Acceptance of china
China said on Thursday that it would need to approve the ByteDance’s proposed deal with the White House, indicating how its bid to lift the ban in the United States could be further complicated.
40% of Americans retract Trump’s threat to ban Trump if it is not sold to an American buyer, a Reuters / Ipsos national poll found last month. Among Republicans – Trump’s party – 69% said they supported the order, though only 32% expressed familiarity with the app.
The White House has stepped in to try what she perceives to be the “untapped” Chinese apps of American digital networks. Beyond Tickcock, Trump has also issued an order prohibiting transactions with Tencent Holding Ltd.’s messenger app WeChat.
Earlier this year, Chinese gaming company Beijing Kunlun Tech Company Limited sold the gay dating app Grindr, purchased in 2016, for $ 620 million, following a split order from CFIUS.
Bytdance acquired Shanghai-based video app musical.ly – whose user base was largely American – in 2017 without seeking CFIUS approval for $ 1 billion, it was relaunched as Tickcock the following year. Reuters reported last year that CFIUS was investigating TeakTalk.
(Except for the headline, this story has not been edited by NDTV staff and published from a syndicated feed.)