TikTok owner seeking US$60bil valuation in US transaction


  • Technology
  • Monday, 21 Sep 2020

Oracle and Walmart have rights to buy 12.5% and 7.5%, respectively, of a newly established TikTok Global under an agreement that won the approval of President Donald Trump, the person said, asking not to be named discussing private negotiations.

HONG KONG: China’s ByteDance Ltd is seeking a valuation of US$60bil for TikTok as Oracle Corp and Walmart Inc take stakes in the short-video app’s business to address US security concerns, according to a person familiar with the matter.

Oracle and Walmart have rights to buy 12.5% and 7.5%, respectively, of a newly established TikTok Global under an agreement that won the approval of President Donald Trump, the person said, asking not to be named discussing private negotiations.

The two companies would pay a combined US$12bil for their stakes if they agree to that asking price.

The final valuation price had not been set as the parties worked out the equity structure and measures for data security, the person said. Terms are still in flux and the proposed valuation could still change.

ByteDance was pressured into a deal for TikTok when Trump threatened to ban the app in the US over national security concerns.

After Microsoft Corp made a proposal for a full buyout of the service, ByteDance instead turned to Oracle’s offering in which the Chinese parent will maintain a solid majority stake.

“I approved the deal in concept, ” Trump told reporters on Saturday as he left the White House for a campaign rally in Fayetteville, North Carolina. “If they get it done, that’s great. If they don’t, that’s OK too.”

ByteDance and Oracle representatives didn’t immediately respond to requests for comment.

ByteDance may end up owning as much as 80% of TikTok Global, which would include the app’s operations in the US and the rest of the world excluding China. Venture firms, including Sequoia Capital and General Atlantic, may also acquire equity in the new business.

Under the current proposal, there will be five seats on the board of TikTok Global. Walmart’s chief executive officer Doug McMillon would become a director, the retailer said in a statement.

Oracle has given reassurances that it can protect TikTok user data from foreign influence.

“Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud, ” said Oracle CEO Safra Catz in a statement.

“We are a 100% confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users.” — Bloomberg

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