* Blackstone mulls joining front-running bid by ByteDance
investors
* TikTok must divest by April 5 or face US ban
* Trump may extend deadline, reduce China tariffs to
finalize
TikTok deal
(Adds background about the current ownership structure, and
history of White House involvement, in paragraphs 9-11)
March 28 (Reuters) – Private equity firm Blackstone is
evaluating making a small minority investment in TikTok’s U.S.
operations, according to two people familiar with the matter.
Blackstone is discussing joining Chinese parent company
ByteDance’s existing non-Chinese shareholders, led by
Susquehanna International Group and General Atlantic, in
contributing fresh capital to bid for TikTok’s U.S. business.
The group has emerged as front-runners.
Their proposal entails spinning off TikTok’s U.S. operations
into a separate entity and diluting Chinese ownership in the new
business to below the 20% threshold required by U.S. law.
TikTok, General Atlantic, and Blackstone declined to
comment. Susquehanna did not respond to a request seeking
comment.
The fate of the app used by nearly half of all Americans has
been up in the air since a law, passed last year with
overwhelming bipartisan support, required ByteDance to divest
TikTok by January 19 or face a ban on national security grounds.
TikTok briefly went dark in the U.S. in January after the
Supreme Court upheld the ban, but flickered back to life days
later once U.S. President Donald Trump took office and postponed
enforcement of the law to April 5.
Trump has said he may extend that deadline further and
dangled a possible reduction in tariffs on China to try to get a
deal done. U.S. Vice President JD Vance said he expects the
general terms of an agreement that resolves ownership of the app
to be reached by the April deadline.
ByteDance and its investors have not disclosed how much
fresh investment would be needed to buy out Chinese shareholders
and meet the requirements of the U.S. law.
According to legal filings from TikTok last year, global
investors own about 58% of ByteDance, while the company’s
Chinese founder Zhang Yiming owns another 21% and employees of
different nationalities – including about 7,000 Americans – own
the remaining 21%.
The White House has been involved to an
unprecedented level
in the closely watched deal talks, effectively playing the
role of investment bank.
Reuters and others reported in January that Trump’s
administration was
working on a plan for TikTok
that would involve tapping Oracle and some
existing ByteDance investors to take control of the app’s
operations.
(Reporting by Dawn Chmielewski in Los Angeles, with additional
reporting from Katie Paul and Krystal Hu in New York and Kane Wu
in Hong Kong; editing by Kenneth Li and Marguerita Choy)
