TikTok owner seeking $81 billion valuation in US deal

ByteDance may end up owning as much as 80 per cent of TikTok Global. PHOTO: EPA-EFE

SAN FRANCISCO (BLOOMBERG) - China's ByteDance is seeking a valuation of US$60 billion (S$81 billion) 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 per cent and 7.5 per cent 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$12 billion for their stakes if they agree to that asking price.

The final valuation price has not been set as the parties are working 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 Mr 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," Mr 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 per cent 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 will 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 per cent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users."

The company will get full access to review TikTok's source code and updates to make sure there are no back doors used by the company's Chinese parent to gather data or to spy on the video-sharing app's 100 million American users, according to people familiar with the matter.

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