CEO Kevin Mayer resigns, CEO of corporate and private equity investors agree on deal if Microsoft bid falls behind
Oracle, the technology giant led by Larry Ellison, has taken the leading position to acquire the Chinese social media app TikTok for a proposed $ 20 billion deal in cash and shares, TheWrap has learned.
The proposed deal would include $ 10 billion in cash, $ 10 billion in Oracle share and 50% of TikTok’s annual profit to flow back two years to TikTok’s China-based parent company, ByteDance, according to one person with knowledge of the deal.
In a wake of an impending change, TikTok’s four-month director Kevin Mayer resigned on Wednesday night after just four months in office, saying: “If we expect to reach a resolution, it is with a heavy heart that I wanted to let you all know that I had decided to leave the company. “
A representative for TikTok and a representative for Oracle declined to comment for this story.
But the proposed deal is complicated by a split between ByteDance CEO Zhang Yiming and General Atlantic and Sequoia Capital, two U.S.-based ByteDance investors with long ties to the Trump administration and Republican causes who both want to see the sale happen. They approached Ellison to buy TikTok and reached out to the White House to close the deal, according to two people with knowledge of the case.
However, Zhang is against any sale, the two individuals said, and did not inform his investors before suing the White House on Monday to block any sale.
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Tensions have risen between Trump economic adviser Peter Navarro, who has called for the closure of TikTok over security concerns, and Treasury Secretary Steven Mnuchin, who is trying to find a U.S. company to buy the app’s domestic operations. . “Mnuchin likes the Oracle deal,” said one insider.
The Funds for Funds and Private Equities declined to comment. Treasury and White House spokesmen did not respond to a request for comment.
Microsoft, the other leading bidder, seems likely to close the deal, according to three people with knowledge of the talks. Microsoft is interested in acquiring a large stake in ByteDance, which has the underlying technology that is driving the phenomenal growth of the popular social app, the three insiders said.
But ByteDance, which is under significant pressure to sell itself after President Trump announced in mid-August that the company had to do so within 90 days to continue operating in the United States due to security concerns, is not inclined to part of them to sell technology, said two people.
Also read: Trump orders TikTok must be sold within 90 days
Mayer was set aside during these negotiations, the individuals said. One person familiar with the negotiations said that the former Disney dealmaker who oversaw the launch of the Disney + streaming service last year, which joined TikTok in May, spoke to one of the top executives at one potential buyer, although they do not specify which company.
Any deal to buy a major stake in ByteDance would cost more than $ 100 billion, insiders said. For its part, Microsoft wrote in early August on a blog that it might be interested in taking over TikTok operations in the United States, Canada, Australia and New Zealand. Zhang was initially comfortable negotiating with Microsoft, as he worked briefly for the company in 2008.
Given its global reach, TikTok is currently believed to be valued at $ 100 billion – about three times larger than publicly traded social media companies such as Twitter or Snap. The company reported revenue of $ 17 billion last year and is currently generating revenue 800 million active users worldwide.
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Doug Leone, one of Sequoia’s partners, is a major donor to Trump’s election campaign and the Republican Party, according to Federal Election Commission records. He and Bill Atlantic, director general of Atlantic, have been working with the White House as the clock strikes Trump’s impending deadline.
ByteDance has raised a whopping $ 7.45 billion since 2012. General Atlantic has invested twice in ByteDance, first as part of the $ 2 billion fundraiser in December 2017 and again in October 2018 for $ 3 billion, according to Pitchbook.com.
Sequoia Capital invested in ByteDance through its China division, Seqouia Capital China, and contributed $ 100 million in Series C financing in June 2014 and a $ 1 billion fundraiser in April 2017.
The app was initially launched as Douyin in September 2016, in China. The following year, ByteDance launched the app in markets outside China. TikTok and Douyin both use the same software, but maintain separate networks to comply with Chinese censorship restrictions.
Samson Amore contributed to this report.
