Bytedance weighs Tiktok stake sale on US concerns

A REPRESENTATIVE FOR THE COMPANY SAID THERE HAVE BEEN NO DISCUSSIONS ABOUT ANY PARTIAL OR FULL SALE OF TIKTOK

HONGKONG/TOKYO: China’s Bytedance Inc. created one of the country’s rare global hits with the addictive video app Tiktok. Now the US government is threatening that success as officials in Washington warn the service presents a security threat.

The Beijing-based company, led by chief executive officer (CEO) Yiming Zhang, is weighing a range of options to address those concerns, according to people familiar with the matter. Advisors are pitching everything from an aggressive legal defence and operational separation for

Tiktok to sale of a majority stake, said the people, asking not to be named because the discussions are private. Selling more than half the business could raise substantially more than $10 billion, one person said.

Bytedance would prefer to maintain full control of the business if possible, given its soaring popularity and profit potential. It may argue that Tiktok presents no security threat or that the US has no legal standing over the business.

Bytedance has considered selling a chunk of Tiktok if necessary to protect the value of the business, the people said. The most likely sale scenario would be for the company to sell a majority stake to financial investors, one person said. Earlier investors include Softbank Group

Corp., Sequoia Capital and Susquehanna International Group.

Talks about Tiktok’s future are preliminary and no formal decision has been made, the people said. A representative for the company said there have been no discussions about any partial or full sale of Tiktok. “These rumors are completely meritless,” the representative said.

Bytedance has emerged as the world’s most valuable startup on the explosive popularity of Tiktok. But with escalating tensions between China and the US, American politicians have warned the app represents a national security threat and urged an investigation. The Committee on Foreign Investment in the US has begun a review of Bytedance’s 2017 purchase of the business that became Tiktok,

reported in

November.