How ByteDance's CEO balked at selling TikTok's US business

REUTERS: ByteDance founder and CEO Yiming Zhang's decision to drop his pursuit of a sale of TikTok's U.S. operations to Microsoft Corp in favor of a partnership with Oracle Corp was the culmination of weeks of pressure from China's government and the Beijing-based firm's investors, according to people familiar with the deliberations.

This offer fell short of ByteDance investors' expectations, the sources said. In arguing for its bid with the Trump administration and U.S. lawmakers, Microsoft upset Zhang, because it referred to TikTok as a security risk it could fix, the sources added. ByteDance has maintained that its ownership of TikTok presents no such risk.

ByteDance has worked feverishly in the last few days on a deal proposal that would allow the Chinese company to retain a minority stake in TikTok while addressing U.S. security concerns, the sources said. Zhang is referring to this deal in discussions with other ByteDance executives as a restructuring, the sources said. One of the sources called the proposed arrangement akin to a joint venture.

The proposal calls for the Committee on Foreign Investment in the United States , the U.S. government panel overseeing the deal talks, to approve board directors at TikTok, as well as relationships with major vendors, the sources added. The arrangements would be similar to those CFIUS put in place when Lenovo acquired IBM's personal computer business in 2005 and SoftBank Group Corp acquired U.S. wireless carrier Sprint in 2013, according to the sources.

Source: News Formal (newsformal.com)

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