ByteDance aims to conduct TikTok IPO to win proposed U.S. deal

China’s tech giant ByteDance Limited is planning a U.S IPO (Initial Public offering) of TikTok Global, the new firm that will control the TikTok if its proposed deal is cleared by the Trump administration.

The Chinese company is racing to settle a deal with the White House that will avert a U.S. ban on TikTok that Donald Trump has warned may happen as early as next week. Trump administration last month inked an executive order to divest TikTok’s U.S operations amid concerns that users’ private data could be passed to the government of China. On Wednesday, he raised concerns over ByteDance’s move to hold a majority stake in TikTok.

Sources cite that the U.S government and ByteDance have agreed to a term sheet on a few aspects of a deal, although President Trump hasn’t yet approved it. Oracle Corp., ByteDance U.S top investors, and potential partner Walmart may hold a minimum of a 60% stake in U.S operations of TikTok.

The new firm TikTok Global will have a majority of U.S directors, an American chief executive, and a security veteran on the board. Oracle has reportedly agreed to take a 20% stake in the company. If retail giant Walmart enters the deal, its CEO Doug McMillon would join TikTok Global’s board.

However, it is still not clear whether ByteDance could present the agreement to Chinese government as keeping most of the ownership of TikTok. Chinese government officials previously said that they don’t want ByteDance to approve a forced sale of TikTok’s U.S operations.

If the deal is approved, TikTok IPO would be of the one of biggest tech sector’s stock market debuts, given that the social media app was valued by investors at over USD50 billion. The filing of the IPO is expected come in about year on a U.S stock exchange.

Meanwhile, Beijing said it would need to accept ByteDance’s planned deal with the U.S government, highlighting how its attempt to stop ban in America could be further complicated.

Source: https://financialpost.com/pmn/business-pmn/bytedance-plans-tiktok-ipo-to-win-u-s-deal-as-deadline-looms-sources