White House of­fi­cial raises fresh doubts about fu­ture of TikTok

Ad­viser claims con­flict be­cause CCP uses Mi­crosoft’s soft­ware

Irish Independent - - News | John Hume: 1937-2020 - Yingzhi Yang and Kane Wu

WHITE House ad­viser Peter Navarro has told CNN that Mi­crosoft might not be the right com­pany to buy TikTok’s US op­er­a­tions, be­cause of the US tech­nol­ogy gi­ant’s ex­ist­ing busi­ness in China.

“This is not a white hat com­pany,” Navarro says, claim­ing the Chi­nese Com­mu­nist Party uses Mi­crosoft soft­ware, a po­ten­tial con­flict, and asks whether TikTok in the US should be “sim­ply banned” rather than sold.

A race to sell Chi­nese-owned TikTok be­fore it is banned by the US is the most high-pro­file case yet of com­pany-level fall­out from the widen­ing gulf be­tween the two coun­tries.

Mr Navarro de­clined to say whether he is ad­vis­ing Pres­i­dent Trump against Mi­crosoft’s

bid to pur­chase TikTok.

Mean­while, the po­ten­tial deal for Mi­crosoft to buy TikTok’s US op­er­a­tions pro­voked an out­cry yes­ter­day on Chi­nese so­cial me­dia as well as crit­i­cism from a prom­i­nent Chi­nese in­vestor in TikTok owner ByteDance.

The US tech gi­ant for­mally de­clared its in­ter­est on Sun­day af­ter Pres­i­dent Trump, – who has cited na­tional se­cu­rity risks posed by the Chi­nese-owned short video app – re­versed course on a planned ban and gave the two firms 45 days to come to a deal.

The pro­posed ac­qui­si­tion of parts of TikTok, which boasts 100 mil­lion US users, would offer Mi­crosoft a rare op­por­tu­nity to be­come a ma­jor com­peti­tor to so­cial me­dia gi­ants such as Face­book and Snap.

Shares in Mi­crosoft, which owns the busi­ness so­cial me­dia net­work LinkedIn and is also seek­ing to buy TikTok’s Cana­dian, Aus­tralian and New Zealand in­ter­ests, rose nearly 3pc in early trades yes­ter­day.

ByteDance has not pub­licly con­firmed the sale talks. But in an in­ter­nal let­ter to staff yes­ter­day, the com­pany’s founder and CEO Zhang Yim­ing said the firm had started talks with a tech com­pany it did not iden­tify to clear the way “for us to con­tinue of­fer­ing the TikTok app in the US”.

Clinch­ing a deal that will sat­isfy all par­ties and po­ten­tially act as a light­ning rod for US-China re­la­tions will be a tall or­der.

Peo­ple close to the sit­u­a­tion have told Reuters that all of TikTok could be worth $50bn (€42.5bn), but the forced sale of the US di­vi­sion and some other units alone will likely yield much less than that.

“A forced deal un­der Wash­ing­ton’s shot­gun could open up for end­less lit­i­ga­tions if it should re­sult [in] an un­favourable out­come to ex­ist­ing pri­vate share­hold­ers,” said Fred Hu, chair­man of Pri­mav­era Cap­i­tal Group, an in­vestor in ByteDance and one of China’s best known pri­vate eq­uity groups.

Mr Hu said Mi­crosoft was a cred­i­ble buyer but ques­tioned how selling large parts of TikTok’s op­er­a­tions at an early stage of its growth could ever be a good deal for ByteDance.

“It ab­so­lutely makes no sense. Bytedance is an in­no­cent vic­tim of the mad pol­i­tics and mad geopol­i­tics,” he said. “It is a sad out­come for Bytedance, for en­tre­pre­neur­ial cap­i­tal­ism, and for the fu­ture of global com­merce.”

“This is not a stan­dard M&A sit­u­a­tion, this is hard to pre­dict,” said one se­nior banker with a US bank in Hong Kong, say­ing that it would be a ques­tion of how to struc­ture a deal in a way that would keep Wash­ing­ton happy.

U-turn: Don­ald Trump gave the firms 45 days to come to a deal

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.