Earlier this month US President Donald Trump indicated that a deal was nearly done that would see a group of “very wealthy” Americans take ownership of TikTok’s US operations, satisfying demands made by US Congress last year regarding TikTok’s ownership, and stopping the TikTok app from being banned in the country. However, current TikTok owner ByteDance seemed less certain any deal had been agreed, and now one of the backers of that deal, private equity giant Blackstone, has reportedly bailed.
Time is TikTokking for China-based ByteDance to sell the TikTok app in the US to allay fears that the Chinese government has access to user-data via the Chinese parent company. In theory the change of ownership needs to be completed by 17 Sep otherwise TikTok will be banned.
Of course, Trump has already pushed back that deadline three times and will probably do it again if necessary. But the President unilaterally pushing back Congress’s TikTok ban is slightly less controversial if it looks like a sale is genuinely in the pipeline.
When recently bullishly predicting that a deal was now nearly done, Trump only said that a group of “very wealthy people” were behind the move to ensure that TikTok US is majority owned by American investors.
Reuters reports that the favourite to complete the deal is a consortium led by Susquehanna International Group and General Atlantic, which are both already investors in ByteDance. KKR, Andreessen Horowitz and Oracle are also thought to be involved, while Blackstone was a minority investor. ByteDance would also retain a minority stake under the proposed transaction.
But one of those “sources familiar with the matter” has told Reuters that Blackstone has now stepped away from the arrangement. It’s not clear why, but all the ongoing uncertainty around what is going to happen with TikTok US might have prompted the equity firm’s decision.
ByteDance itself has been keen to play down Trump’s bold suggestion that a deal is nearly done. And any sale, even of just TikTok’s US operations, will need approval from the Chinese government. Getting that approval is tied up with wider US/China trade talks, which are also full of uncertainty.
Reuters writes, “Blackstone’s exit highlights the complexities and uncertainties involved in the deal, as the ongoing talks over TikTok’s fate have now become part of Trump’s broader trade negotiations with China, and Trump said he would speak to President Xi Jinping about it”.
All of which adds even more to the uncertainty around TikTok’s future in the US. Which is rather annoying for all the American artists, creators and record labels for whom TikTok remains a key promotional and fan engagement platform.
