Despite an executive order being signed, the deal for TikTok’s divestiture in the US is still not finalised, but Oracle and Silver Lake look set to be key players.
As is his wont, Donald Trump yesterday (25 September) signed an executive order before the media cameras in the Oval Office that declared TikTok in the US would be “saved”, but we are still relying on hearsay and anonymous sources for the actual details.
What does appear certain is that Larry Ellison’s Oracle will be a key player in any final deal, while both Reuters and CNBC are citing sources saying the other key investors will be Silver Lake and its partner Abu Dabi-based MGX, an AI investment firm with close ties to the United Arab Emirates political class.
According to sources cited, these investors would control between 45-50pc of TikTok US, with around 30pc remaining with existing ByteDance shareholders. ByteDance is TikTok’s Chinese parent company, and to comply with requirements set out in 2024 legislation, it will only be able to retain a 20pc stake.
Since the passing of the bipartisan legislation in the US Congress, Trump has extended the deadline for the ban multiple times – with the most recent extension occurring last week – in order to give ByteDance and US-based investors the opportunity to finalise a deal.
Yesterday’s executive order declared that the plan would address the requirements set out in the 2024 law, while US vice-president JD Vance said the new entity would be valued at $14bn, although no details were offered as to how the administration reached this valuation, well below analysts’ estimates given the reach of TikTok in the US – estimated to have around 170m users.
The Wall Street Journal and others cited White House officials earlier this week saying ByteDance would copy TikTok’s famed algorithm and lease it to the new US entity as part of the deal. Under the supervision of Oracle and the US administration, the entity would then “replicate” the algorithm for US users. Yesterday’s executive order echoes these points.
In an interview with Fox News on Sunday, Trump sparked concerns over media control when he said Ellison, as well as media mogul Rupert Murdoch, his son – and Fox Corporation CEO – Lachlan Murdoch, and Michael Dell, of computer maker Dell, were likely to be involved as investors and may sit on the board of directors, which will have six US seats, with one seat held by Bytedance.
As ever, the executive order may be signed, but we must still await the final details of the long-touted deal.
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