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The private equity giant Blackstone is weighing taking a small stake in TikTok ahead of an April 5 deadline set by President Trump for the Chinese-owned app to change its ownership or face a U.S. ban under federal law, two people familiar with the situation said.
Investing in TikTok would give Blackstone the chance to take a bite of one of the most popular social media applications in the world, which has over 170 million American users. It is unclear if any investment — which would likely be a fraction of the size of Blackstone’s typical deals — will move forward, and other investors are also circling the app, which is owned by the Chinese internet giant ByteDance, four people familiar with the talks said.
If an investment happens, it could boost favor with President Trump, who has made it a mission to save TikTok from disappearing under the federal law. Last year, Congress passed the law that forces a sale of the app because of national security concerns related to its Chinese ownership.
Mr. Trump extended the deadline for a deal in January, and has suggested he could do so again if an agreement isn’t reached next week. He also suggested this week that he might relax upcoming tariffs on China in exchange for the country’s support of a deal.
Blackstone’s talks add to TikTok’s chaotic history in the United States. The video app has repeatedly wriggled out of political efforts to shut it down in the country. In January, the app went dark in the United States for about 12 hours before flickering back to life. A spokesperson for Blackstone said the firm did not comment on deal speculation. Neither TikTok or the White House responded to requests for comment. Reuters earlier reported Blackstone’s interest.
As April 5 approaches, discussion about potential suitors for the app has intensified. Mr. Trump has been repeatedly approached by parties pitching him ideas, and his interest in different arrangements can be fleeting, two other people close to the talks say.
The most likely option is a deal in which existing U.S. investors in ByteDance roll over their stakes into a new independent global TikTok company, two people involved in the conversations have said. Additional U.S. investors, like Blackstone, would be brought on to reduce the proportion of Chinese investors.
Doing so would sidestep a full sale of TikTok, which would be prohibitively expensive for most buyers and could force current ByteDance investors to sell a valuable company under duress, likely depressing the price. The law calls for no more than 20 percent of TikTok or its parent company to be owned by people or companies in so-called foreign adversary countries, a list that includes China.
“There are a number of alternatives we can talk to President Trump and his team about that are short of selling the company that allow the company to continue to operate, maybe with a change of control of some kind, but short of having to sell,” Bill Ford, chief executive of General Atlantic, one of ByteDance’s U.S. investors, told CNBC in January.
Blackstone, which manages more than $1 trillion, typically gets involved in megadeals. It has investments in businesses as varied as Rover, an online marketplace for pet care; Spanx, the women’s wear brand; and the Jersey Mike’s sandwich chain.
The private equity firm’s chief, Stephen Schwarzman, is a Republican megadonor and Trump supporter with substantial business interests in China.
Today, ByteDance’s largest investors include Susquehanna, a global trading firm that owned roughly 15 percent of the Chinese company as of last year, and General Atlantic, which first invested in ByteDance in 2017 at a $20 billion valuation. Susquehanna has played a key role in negotiating whatever deal may happen, two people said, and is likely to increase its equity stake in TikTok as part of the new deal.
Oracle, which hosts some of TikTok’s data, has also been involved in the talks, two people said. A company spokeswoman did not immediately respond to a request for comment.
David McCabe and Sapna Maheshwari contributed reporting.
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