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The White House is about to conclude an agreement for American investors to buy Tiktok American operations, fighting against the control of the popular video application of its Chinese owners.
Under the terms of the transaction, a group of new external investors, including Andreessen Horowitz, Blackstone, Silver Lake and other large private capital companies, would have about half of Tiktok’s American activities, according to several people familiar with the issue. This American unit would be extinguished from its parental bydance based in Beijing, these people said.
Large investors existing in Tiktok, who include General Atlantic, Susquehanna, KKR and Cotoue, would also take holdings in the American branch constituting around 30% of the company.
The plans, which were still in the preliminary stages and could still change according to the people involved in the process, before a deadline for an American law on April 5 which would prohibit the application in America unless its owner based in Beijing does not sell it to non -Chinese entities.
President Donald Trump officials were to meet on Wednesday to discuss negotiations, and if the president gave his blessing, the agreement could be announced imminent, people said.
Officials of the White House and Tiktok did not immediately respond to requests for comments. Andreessen Horowitz, Blackstone and General Atlantic refused to comment, while Cotue, Silver Lake and Kkr did not respond immediately.
Any agreement should be approved by Trump, as well as by the Chinese government and government, which previously threatened to block any transaction but has since softened its position.
Bytedance would retain participation in just under 20% of the company, under the terms of the agreement, in order to meet the requirements of American legislation which indicate that no more than a fifth in the control of a “foreign adversary”.
Plans would still require months of diligence, structuring and other financing commitments of companies typical of normal buyout agreements, the possibility that its structure changes or certain donors increase or decrease their proposed investment, added people. One person said the groups would have three to four months to complete the derivative process.
Oracle, co-founded by Trump Ally Larry Ellison, would guarantee Tiktok American data in the agreement, people said.
However, there remains a point of discord that would control the highly sought -after Tiktok algorithm, said several people. An option being discussion is that Bytedance would continue to develop and exploit the algorithm, which was a central request from the Chinese government, while the new American group would access it thanks to a license agreement and would have surveillance over any change, said a person.
But some analysts have argued that the algorithm must be fully exploited by the American entity in order to meet the requirements of the legislation.
In addition, Amazon de Jeff Bezos had made an eleventh hour offer to buy the American company from Tiktok, according to several people familiar with the issue and reported for the first time by the New York Times. However, the supply of existing investors has remained the forerunner, said several people.
Additional report by George Hammond and Rafe Uddin in San Francisco and Harriet Agnew in London
