The new US company that TikTok’s owner ByteDance Ltd (字節跳動) plans to form with Oracle Corp intends to hold an initial public offering (IPO) in about a year, people familiar with the matter have said.
The new company, which would be called TikTok Global, US Secretary of the Treasury Steven Mnuchin said, would be the result of a transaction forced by US President Donald Trump last month because of national security concerns about TikTok’s Chinese ownership.
On Wednesday, Mnuchin sent ByteDance a revised terms sheet, and the company and Oracle accepted it.
Photo: Wang Tingshu, Reuters
The government’s changes addressed national security concerns about the transaction, said people familiar with the matter, who asked not to be identified.
Trump was briefed on some of the parameters of the deal and he did not want China to retain a controlling interest in TikTok, which he thought would imperil Americans’ personal information, said an administration official, who was granted anonymity to discuss the sensitive negotiations.
Administration officials had on Thursday spoken with the companies involved in the deal, Trump told reporters as he left the White House for a campaign trip to Wisconsin, without elaborating.
“We spoke today — to Walmart, Oracle, I guess Microsoft is still involved — we’ll make a decision, but nothing much has changed,” Trump said.
ByteDance last weekend rejected Microsoft Corp’s bid for the US operations of TikTok, and a person familiar with the company said on Thursday that it was no longer involved in talks related to TikTok.
During the trip to Wisconsin, White House Chief of Staff Mark Meadows said: “The situation is very fluid. There’s no definite proposal that the president’s being asked to consider or reject at this point — and obviously he’ll need to weigh in before the deadline” tomorrow.
In a sign that the deal might go through, US Secretary of State Mike Pompeo, who held some of the strongest reservations about the agreement, had since softened his opposition and told Trump so on Wednesday, two people familiar with the matter said.
ByteDance is trying to win US approval for a transaction with Oracle that would leave the Chinese-headquartered parent company with majority ownership of TikTok.
Any deal must be approved by both Trump — who could still reject the transaction — and the Chinese government.
The Chinese government is unlikely to oppose an arrangement that does not involve the transfer of ByteDance’s technology, especially if the Chinese parent retains majority control of TikTok, another person close to the negotiations said.
White House adviser Jared Kushner is aware of the revised terms, but has not reviewed the latest details in depth or weighed in on whether Trump should sign off on the deal, one person familiar with the matter said.
Under the plan, Oracle would acquire a minority stake in a newly formed TikTok that would be headquartered in the US with an independent board approved by the US government.
The new terms, which are designed to protect the data of US citizens from falling into Chinese hands, include 20 pages of detailed provisions over data and national security, the people said.
Under the terms, the board of directors would need to consist of US citizens and would include a national security committee.
Terms of the proposed deal would give Oracle full access to TikTok’s source code and updates to make sure there are no backdoors used by the company’s Chinese parent to access data on the video-sharing app’s 100 million US users, Bloomberg reported.
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