Private equity giant Blackstone is measuring Tiktok's small stakes ahead of the April 5 deadline set by President Trump for Chinese-owned apps to change ownership and face US bans under federal law.
Investing in Tiktok gives Blackstone the opportunity to bite one of the world's most popular social media applications, with over 170 million American users. It is unclear whether investments, which are likely to be part of Blackstone's typical trade scale, will move forward, and the four who discussed other investors also circling apps owned by China's Internet giant integration.
If investment occurs, it could boost President Trump's favor. Last year, Congress passed a law enforced the sale of the app due to national security concerns related to Chinese ownership.
Trump extended the deadline for the deal in January and suggested that he could do so again if an agreement was not reached next week. He also proposed this week that tariffs in China may be eased in exchange for support for the country's deal.
Blackstone's speech adds to Tiktok's chaotic history in the United States. The video app has repeatedly groaned from political efforts to close it down domestically. In January, the app went dark in the US for about 12 hours, then returned to life. A Blackstone spokesman said the company had no comment on the transaction speculation. Neither Tiktok nor the White House responded to requests for comment. Reuters previously reported Blackstone's interest.
Coming closer to April 5th, the debate on potential suitors for the app has increased. Trump has been repeatedly approached by parties pitching his ideas, and his interest in the various arrangements could be fleeting, says two others close to the lecture.
The most likely option is a deal whereby existing US investors at BayteDance roll beyond their stocks into a new independent, global tiktok company, said two people involved in the conversation. Additional US investors like Blackstone are brought in to reduce the share of Chinese investors.
By doing so, you avoid selling Tiktok entirely. This is extremely expensive for most buyers, and could force current Buitedan investors to obsessively sell valuable companies, potentially pushing prices down. The law requires that no more than 20% of Tiktok or its parent companies be owned by people or businesses in so-called foreign enemy countries, which are listed including China.
“There are many alternatives that we can talk to President Trump and his team, but that allows the company to continue selling. There are probably some control changes, but it doesn't mean they have to sell.”
Blackstone, which manages over $1 trillion, is usually involved in Megadeals. They invest in as diverse companies as Rover, the online pet care market. Spanx, a women's clothing brand. Jersey Microphone sandwich chain.
Private equity firm chief Stephen Schwartzman is a Republican mega-donor and Trump supporter, bringing substantial business benefits in China.
Today, Baitedan's biggest investors include Susquehanna, a global trading company that owned about 15% of Chinese companies as of last year, and Atlantic General, who first invested in the ordinance at a $20 billion valuation in 2017. Susquehanna said it has played a key role in negotiating the deal between the two, and it is likely that the two will increase their interest in Tiktok's shares as part of the New Deal.
Oracle, which hosts some of Tiktok's data, is also involved in the consultation, the two said. A company spokesperson did not immediately respond to requests for comment.
David McCabe and Sapna Maheshwari contributed to the report.
