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Conflicting deal structure could threaten Oracle-TikTok takeover

  • Just a day after it was announced, Oracle's (NYSE:ORCL) takeover of TikTok (BDNCE) is looking rocky.
  • The Chinese government, which needs to approve the deal, has remained quiet on the transaction, though it has signaled its own reluctance through state-owned media. Hu Xijin, editor-in-chief of the Global Times, tweeted that Beijing would likely reject the takeover "because the agreement would endanger China's national security, interests and dignity."
  • There are also differing statements about ownership. While parent ByteDance has said it will own 80% of new entity TikTok Global, Oracle and Walmart (NYSE:WMT) have together said ByteDance’s ownership would be distributed to its U.S.-based investors and ByteDance itself would have no direct stake. They also related that four of TikTok Global's five-member board would be American (an arrangement that may be rejected by Beijing).
  • President Trump did not comment on the conflicting accounts, but said the deal was "working its way through" and he wouldn't approve the transaction if ByteDance retains control of TikTok Global. "If we can save (TikTok), we will save it, and if we can't we will cut it off. We have to have total security," he told reporters.

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