Negotiations to sell TikTok’s US assets to Microsoft in ‘top of the 7th inning’

In the race against the clock set by the Trump administration, a binding deal to buy the controversial but wildly popular Chinese-owned app TikTok will most likely be signed with a U.S. suitor by the mid-September deadline, but the actual close of the deal could come several months later due to President Trump’s shifting and extending key deadlines, FOX Business has learned.

Sources with knowledge of the negotiations told FOX Business “there will most likely be a signed piece of paper by the September 15th cut-off date but the details will take the full 120 days to complete.”

TRUMP SAYS ORACLE COULD HANDLE TIKTOK: 'GREAT COMPANY'

While negotiators “can’t count out a dark horse, Microsoft, with a market cap of $1.3 trillion, is the white knight,” sources said, due to the software and cloud giant’s strong cash position and strength of management "and that “(Microsoft CEO) Satya Nadella is a man of high integrity.”

Microsoft had no immediate comment.

Sources close to management’s thinking at TikTok parent ByteDance tell FOX Business while Oracle, with a market cap of $173.6 billion, has shown late-stage interest in being part of a deal to scoop up the U.S. assets of the Chinese-owned short video app, it’s Microsoft that’s “got the head start and now has the momentum to get the deal across home plate.”

Oracle had no immediate comment.

MICROSOFT CORP. IN TALKS WITH OUTSIDE INVESTORS FOR A POSSIBLE TIKTOK BID

In terms of Microsoft’s bid, the tech giant has expressed a desire to buy more of TikTok’s global operations, including TikTok U.K., but sources tell FOX Business that ByteDance is not interested in selling the U.K. division at this time.

“(ByteDance CEO Zhang Yiming) will include TikTok’s New Zealand, Canada, and Australia assets in the U.S. deal but there’s no reason to include the U.K. piece,” the source says.

Ticker	Security	Last	Change	Change %
MSFT	MICROSOFT CORP.	423.46	+0.47	+0.11%
ORCL	ORACLE CORP.	184.84	+2.14	+1.17%

TikTok Ban Looms as timing shifts

On Aug. 6, Trump issued his first executive order threatening to ban the app -- a favorite of millennials who primarily utilize it to produce dance clips and animal videos -- within 45 days unless TikTok parent ByteDance divests of the U.S. division. Trump has accused TikTok of being a national security threat, although he has cited no specific evidence. Last Friday, the president altered the demand, indicating he was extending the deadline to 90 days but reiterated his order that ByteDance either sell or spin off TikTok’s U.S. business.

“There is credible evidence that leads me to believe that ByteDance ... might take action that threatens to impair the national security of the United States,” the president wrote in the Friday order.

WHY MICROSOFT LEADS IN TIKTOK PURSUIT

The administration has indicated that its concerns center on the huge amount of user data Tiktok has compiled and whether the company protects user privacy. In addition, the administration demanded that, upon a sale, ByteDance destroy all U.S. user data and inform the Committee on Foreign Investment in the United States (CFIUS) once that divestment is complete. TikTok sources confirmed to FOX Business that 100 million users in the U.S. have downloaded the app and 50 million are daily active users. They stressed all U.S. data is kept stateside and backed up on servers in Singapore but is not shared with China.

TikTok CEO Kevin Mayer “the seasoned deal expert who can get this done”

A top media industry source close to TikTok CEO Kevin Mayer told FOX Business that Mayer, who was lured away from Disney in May to run the global video platform, is legendary for his deal-making prowess. During his years at Disney, Mayer led multiple complicated acquisitions, including Pixar, Lucasfilm and Marvel Entertainment -- all which ultimately proved to be major financial wins for the entertainment giant.

“No CEO has ever been put in the crosshairs so quickly and publicly by a president of the United States who suddenly demands a sale to a U.S. entity," the source said. "Given the situation, Trump is lucky there’s a deal-maker (like Kevin) in the chair who can get this done.”

Mayer’s spokesperson declined to comment.

BLACKSTONE DISCUSSED JOINING MICROSOFT IN POTENTIAL BID FOR TIKTOK

“Microsoft best positioned to cleanse and convert TikTok to an all-U.S. entity”

Analysts appear to agree that Microsoft has the inside track. Dan Ives, Wedbush managing director of equity research, tells FOX Business that Oracle is basically a non-starter, and that while many Silicon Valley giants have either kicked the tires or looked longingly at the app, the Redmond, Wash.-based tech behemoth has the best ability to untangle the massive engineering challenges that technically extricating TikTok from its Chinese ownership could entail.

“Outside of Apple there’s no other R&D team in the U.S. that rivals Microsoft and what’s under the hood in Redmond. I don’t have any concerns about lines of codes that need to be cleansed and converted from Chinese ownership. That’s a task Microsoft is well up to,” said Ives, who believes the final price for TikTok would be "somewhere between $25 billion and $40 billion dollars," although Reuters reports Bytedance investors say it could go as high as $50 billion.

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The global culture of cool TikTok owns has proven a tough pitch for rivals to swing at due to its daunting lead and ease of use. Facebook’s recent unveiling of its own version called “Reels” was met with a scathing review by the New York Times, which called it “a failure as a TikTok clone...confusing, frustrating, impossible to navigate.”

While FOX Business' sources were firm on a Sept. 15 deal, Ives predicts a Microsoft-TikTok announcement could come as early as Labor Day.

“TikTok is the prom and Microsoft is the only dance partner.”

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