Mnuchin sets sights on Tiktok

It’s unclear if he and investors could pull off the purchase of the Chinese-held app

Steven Mnuchin is targeting a purchase of Tiktok from its Chinese parent company, a day after House lawmakers passed a bipartisan bill that would ban the wildly popular social media app in the U.S.

The former U.S. Treasury secretary has spoken to potential coinvestors about acquiring Tiktok, he said in an interview with CNBC on Thursday, declining to give any specifics. U.S. lawmakers are pushing for a ban of the app unless its owner Bytedance Ltd. divests it, driven by concerns over Chinese government influence on the American public.

If Mnuchin follows through with a purchase, it’ll be the second high-profile deal he will have marshalled this year, after leading a $1 billion equity investment in troubled commercial real estate lender New York Community Bancorp. It would also mark his return to a saga that started in 2020, when former President Donald Trump first ordered Bytedance to sell its U.S. assets.

It’s unclear whether Mnuchin, who runs a private investment firm that counts Saudi Arabia among its backers, will be able to pull off a deal. Tiktok’s U.S. business would be worth $35 billion to $40 billion, Bloomberg Intelligence estimates.

Though Mnuchin’s investment firm, Liberty Strategic Capital, raised about $2.5 billion in 2021, the high valuation means he’d still need multiple equity investors to join any potential bid.

“It’s a great business,” Mnuchin said of Tiktok in an interview with CNBC. “It should be owned by a U.S. business. There’s no way the Chinese would ever let a U.S. company run something like this in China.” He added that the social media app would be remade in the U.S. with homegrown technology.

The House voted overwhelmingly on Wednesday to approve a bill that would effectively eliminate the app in the U.S. unless it finds a new owner in about six months. Now, the short-video app used by 170 million Americans has turned its lobbying efforts to the Senate, where passage is less certain.

Tiktok intends to exhaust all legal challenges before it considers any kind of divestiture, people familiar with the matter have told Bloomberg.

Representatives for Tiktok didn’t immediately respond to a request for comment.

Mnuchin said that under his plan, no investor would own more than 10% of Tiktok, and existing investors would have the option to roll over into the new ownership. While Tiktok’s exact ownership structure is unclear, the plan could be a boon for the U.S. investment companies that have bought into Bytedance.

Institutional investors including Carlyle Group Inc., General Atlantic and Susquehanna International Group own 60% of Bytedance; 20% is owned by the company’s global workforce; an additional 20% is owned by the company’s Chinese co-founder Zhang Yiming.

As the former as head of the Committee on Foreign Investment in the U.S., Mnuchin was instrumental in talks during Trump’s attempt to divest Tiktok. At the time, Microsoft Corp. had expressed interest in purchasing the popular video app and the former Twitter Inc. had also explored a possible bid.

Bobby Kotick, the former chief executive officer of Activision Blizzard Inc., has also expressed interest in buying Tiktok, the Wall Street Journal has reported. Kotick is looking for partners and at a dinner earlier this month, he floated the idea to several people including Openai CEO Sam Altman.

PATRICK SEMANSKY THE ASSOCIATED PRESS Former Treasury Secretary Steve Mnuchin says he’s working to put together an investor group to buy Tiktok, a day after the House of Representatives passed a bill that would ban the popular video app in the U.S. if its China-based owner doesn’t sell its stake.