The multinational software company Oracle is in talks that could see it gatecrash Microsoft’s bid for part of the popular Chinese-owned video app TikTok, whose US operations have been valued at more than $20bn.
Microsoft has been working on a partial takeover of TikTok, which lets users post short video clips, after President Trump ordered the firm to sell its US operations within 90 days or face being shut down, citing concerns over national security.
But Oracle has reportedly met with ByteDance, TikTok’s Chinese parent company, and is working with some of the app’s investors – including venture capital firms General Atlantic and Sequoia Capital – on a rival deal for its operations in the US, Canada, New Zealand and Australia.
Sequoia and General Atlantic attempted to buy a majority stake in TikTok last month, in the belief that doing so would save the company from a forced divestment. They were rebuffed by ByteDance, in part because their offer, with an implicit valuation of around $50bn, was thought to underestimate TikTok’s true worth. Analysts have pegged the value of TikTok’s US arm alone at anything between $20bn and $50bn.
Microsoft has emerged as the most likely candidate to complete a takeover, but Oracle’s attempt to hijack the transaction could boost its advertising and data businesses if successful.
Both Oracle and Microsoft’s bids are not for TikTok’s worldwide businesses, but for subsections of the company’s operations in English-speaking countries. Although the reasons for the limited sale have not been disclosed, the four nations represent all the members of the “five eyes” surveillance alliance other than the UK, where TikTok is attempting to place its international headquarters.
Oracle comes to the negotiating table with several advantages. Time is on its side due to Trump’s 90-day deadline for the sale, meaning the options for long drawn-out discussions are limited.
The company also has an edge when it comes to the politics of the deal. Oracle’s co-founder and chief technology officer, Larry Ellison, America’s fifth richest man, is a public supporter of Donald Trump, having thrown a fundraising event for his re-election in February. He told Forbes in April that “I support him and want him to do well.”
Those connections could enable Oracle to negotiate an advantageous price for the company, given the deep interest in the transaction that the Trump administrationhas shown. In early August, the president argued that the US state should get a cut of proceeds, comparing it to “key money”, an archaic term for a bribe paid under the table by a prospective tenant to a landlord to secure a lease.
The multinational software company Oracle is in talks that could see it gatecrash Microsoft’s bid for part of the popular Chinese-owned video app TikTok, whose US operations have been valued at more than $20bn.
