As China's ByteDance Ltd. has been working with US regulators to lay to rest outstanding security concerns over its impending sale of a stake in music-video app TikTok, companies involved acknowledge that the final approval process might be delayed until after the November presidential election, according to sources cited by Bloomberg.
Oracle Corp., the US multinational computer technology corporation that is set to acquire a stake in TikTok in a deal which received approval "in concept" from President Donald Trump, is still, apparently, in the throes of hashing out the fine-print terms of the move to salvage the social media platform's operations on American soil.
The video-sharing app's parent company ByteDance is said to be locked in talks on a final proposal with an American regulatory body, the Committee on Foreign Investment in the United States (Cfius).
While previously Donald Trump set a 12 November deadline for the globally popular social networking platform to find a suitable US partner or be shut down, if negotiations on hammering out the fine print continue to drag on, there is a likelihood that the deadline might be moved into next month, sources concede.
A number of issues pertaining to the potential deal remain unresolved.
While Oracle and Walmart are reportedly seeking a combined 20 percent stake in the new firm TikTok Global, Donald Trump and Oracle are said to have asserted the deal necessitates a lack of Chinese involvement in the new entity.
However, ByteDance allegedly plans to hold an 80 percent stake in the new company, because the Chinese government is only willing to approve a deal if ByteDance retains a majority stake, says Bloomberg.
Other tricky issues to be dealt with are data security concerns and a possible $5 billion donation to an education fund.
When questioned as to why the negotiations were taking so long, sources cited, in part, the volume of details that need to be ironed out.
Some suggested that TikTok Global has become less of a priority for Donald Trump amid his determination to win approval for a new Supreme Court justice and his re-election campaign.
There has not yet been any official comment on the report from TikTok or Oracle.
TikTok 'Salvage Deal'
The agreement seeking to salvage TikTok's US operations materialised in September, with software company Oracle earlier beating out several other candidates, including Microsoft, in the bid to acquire a stake in the Chinese app from ByteDance.
Oracle is set to become the data partner for the video-sharing platform, while Walmart will take on the role of commercial partner.
In line with the deal, Oracle and Walmart Inc. are to take minority stakes in the newly-formed company, TikTok Global, with four of the company's five board members to be US citizens. Board votes are to be equally weighted, claim sources.
"The board of directors of TikTok Global will include the founder of ByteDance [Zhang Yiming], current ByteDance directors as well as the CEO of Walmart [Doug McMillon]", ByteDance specified in a Monday statement.
Walmart is anticipated to have a more active role in TikTok's products and features than other investors, according to sources, with the retail giant apparently already touting "commercial agreements" with TikTok. The sides are believed to be discussing how to integrate Walmart and TikTok features into their respective apps.
There has not been any comment yet from Walmart pertaining to the latest discussions.
Software maker Oracle isn't expected to take a board seat, with its role tailored specifically to TikTok's data storage and security, writes the outlet.
The original bid from rival, Microsoft Corp., aimed for an outright buyout of TikTok's US assets.
According to ByteDance, the parent company will not be transferring any algorithms or technologies to TikTok Global, while Oracle will be granted the ability to conduct security checks on TikTok American source code.
TikTok in the Crosshairs
TikTok, a globally popular video-sharing platform, recently found itself in the crossfire as tensions escalate between China and the US.
On 6 August, Donald Trump accused the Chinese app of providing Beijing with personal data of American citizens, signing an executive order banning any transactions with TikTok's developer ByteDance Ltd. beginning 45 days after the document's signing, in a move echoing similar broadsides against Shenzhen-based tech giant Huawei and other Chinese firms. A deadline of 15 September for the application to be bought by US owners was accordingly set, with both the Chinese authorities and the app denying the accusation.