In an interview on Thursday, former U.S. Treasury Secretary Steven Mnuchin said he had discussed the acquisition of TikTok with potential co-investors, but he declined to disclose any specific details. The day before, the U.S. House of Representatives passed a bill that would ban TikTok from being used in the United States unless ByteDance sells it within six months.
If Mnuchin eventually completes the TikTok acquisition, it would be the second high-profile deal he has initiated this year, after he led a $1 billion equity investment in troubled NewYork Community Bancorp.
It is unclear whether Mnuchin will be able to reach a deal. Foreign media estimates that TikTok's U.S. business will be worth $35 billion to $40 billion.
Although Mnuchin's investment firm Liberty Strategy Capital raised about $2.5 billion in 2021, TikTok's high valuation means he still needs multiple equity investors to participate in the acquisition.
"This is a huge business opportunity and it should be owned by an American company," Mnuchin said, adding that the social media app would be redesigned using American technology.
After the U.S. House of Representatives overwhelmingly passed a bill targeting TikTok on Wednesday, TikTok, which now has 170 million American users, has turned its lobbying efforts to the Senate, which is less sure it can pass the bill.
TikTok intends to exhaust all possible legal means to avoid a sale, the people said. A TikTok representative declined to comment.
Mnuchin said that under his plan, no investor would own more than 10% of TikTok, and existing investors would have the option to transfer into new ownership. While TikTok's exact ownership structure is unclear, the plan could benefit U.S. investment firms that have already taken stakes in ByteDance.
Institutional investors including Carlyle Group Inc, General Atlantic and Susquehanna International Group hold 60% of ByteDance; 20% is owned by the company's global employees; and the remaining 20% is held by the company's Chinese co-founder Zhang Yiming.
Mnuchin believes that TikTok will be allowed to be sold as long as no technology transfer occurs.
As then-chairman of the Committee on Foreign Investment in the United States, Mnuchin played an important role in Trump's negotiations to sell TikTok. At the time, Microsoft had expressed interest in acquiring it, and Twitter had also explored possible bids.
Oracle ultimately beat out Microsoft’s bid, and Mnuchin helped craft plans for a new company called TikTok Global in which Oracle would take a minority stake, would be headquartered in the United States and have an independent board approved by the U.S. government. The deal disappeared after Trump lost the 2020 election.
Trump has since changed his tune on TikTok, and last week he expressed opposition to the latest bill.
According to foreign media, Kotick, the former CEO of Activision Blizzard, has also expressed interest in acquiring TikTok. Kotick is looking for a partner, and at a dinner earlier this month, he proposed the idea to several people, including Open AI CEO Sam Altman.
Amazon.com Inc may also do the same, as it is a competitor to TikTok Shop.
The article is forwarded from: Jinshi Data