Existing ByteDance investors emerge as front-runners in TikTok deal talks

White House-led Talks on TikTok’s Future Coalesce Around Plan for Non-Chinese Investors to Acquire US Operations

[NEW YORK] White House-led talks on the future of TikTok are coalescing around a plan for the biggest non-Chinese investors in parent company ByteDance to up their stakes and acquire the short video app’s US operations, according to two sources familiar with the discussions.

Plan Entails Spinning Off US Entity and Diluting Chinese Ownership

The plan entails spinning off a US entity for TikTok and diluting Chinese ownership in the new business to below the 20% threshold required by US law, rescuing the app from a looming US ban, said the sources, who asked to be kept anonymous because they were not authorized to speak on record.

Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic Leading Discussions

Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, both of which are represented on ByteDance’s board, are leading discussions with the White House on the plan, the sources said. Private equity firm KKR is also participating, one of the sources added.

Fate of Short Video App Hangs in the Balance

The fate of the short video app used by nearly half of all Americans has been up in the air since a law took effect on January 19, requiring ByteDance to either sell it or face a ban on national security grounds. The law, passed last year with broad bipartisan support, reflects concern in Washington that TikTok’s ownership makes it beholden to the Chinese government and that Beijing could use the app to conduct influence operations against the United States. Free speech advocates have argued that the ban unlawfully threatens to restrict Americans from accessing foreign media in violation of the First Amendment of the US Constitution.

Plan to Keep Oracle Involved

Under the plan proposed by existing investors, software giant Oracle would continue to house US user data and provide assurances that the data is not accessible from China, this source added.

Representatives Unavailable for Comment

Representatives for TikTok, ByteDance, Susquehanna, Oracle, and the White House could not immediately be reached for comment. General Atlantic and KKR declined to comment.

Conclusion

The White House-led talks on TikTok’s future are nearing a conclusion, with a plan to spin off a US entity and dilute Chinese ownership in the new business. The plan involves existing investors, including Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, and private equity firm KKR. If successful, the plan could rescue the app from a looming US ban.

Frequently Asked Questions

Q: What is the plan for TikTok’s future?
A: The plan is for non-Chinese investors to acquire TikTok’s US operations, spinning off a US entity and diluting Chinese ownership to below 20%.

Q: Who is leading the discussions?
A: Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic are leading the discussions with the White House.

Q: What is the concern around TikTok’s ownership?
A: The concern is that TikTok’s ownership makes it beholden to the Chinese government, and that Beijing could use the app to conduct influence operations against the United States.