Former US Treasury secretary Steve Mnuchin putting together investor group to buy TikTok

Former Treasury chief's remarks come after House of Representatives passed bill forcing divestiture

Steve Mnuchin, the former US Treasury secretary, is putting together a group of investors to buy TikTok from its parent company ByteDance.

“It’s a great business,” Mr Mnuchin said in an interview with CNBC. “It should be owned by a US business. There’s no way the Chinese would ever let a US company run something like this in China.”

He added that the social media app would be remade in the US with home-grown technology.

Mr Mnuchin said he had spoken to a number of potential investors but declined to give specifics.

No investor would own more than 10 per cent of TikTok should a sale of the social media company go through, he added.

In any deal, existing investors would have the option to roll over under the new ownership.

Mr Mnuchin leads Liberty Strategic Capital, a private equity firm focused on investing in global technology companies. He established the business after stepping down as US Treasury Secretary.

In 2021, Japan's SoftBank Group said it would invest in the Mr Mnuchin's $2.5 billion fund through the $40 billion second Vision Fund, Reuters reported at the time.

Saudi Arabia's Public Investment Fund is also among the backers of the fund, according to a Financial Times report at the time.

Meanwhile, SoftBank also invested in ByteDance in 2018.

It is not clear if Liberty will be involved in the bid for the TikTok business.

Mr Mnuchin believes the Chinese government would back a sale of TikTok as long as there is no technology transfer.

TikTok intends to exhaust all legal challenges before it considers any kind of divestiture from Chinese parent company ByteDance if the latest US legislation against the app becomes law, sources told Bloomberg.

Representatives for TikTok did not immediately respond to a request for comment.

The US House passed a measure on Wednesday to ban TikTok unless its Chinese owner divests it.

The short-video app used by 170 million Americans has turned its lobbying efforts to the Senate, where passage is less certain.

Bobby Kotick, the former chief executive of Activision Blizzard, has expressed interest in buying TikTok to ByteDance co-founder Zhang Yiming, The Wall Street Journal has reported.

Mr Kotick is looking for partners and at a dinner this month, he floated the idea to several people, including OpenAI chief executive Sam Altman.

Institutional investors including Carlyle, General Atlantic and Susquehanna own 60 per cent of ByteDance while 20 per cent is owned by the company’s global workforce and an additional 20 per cent is owned by the company’s Chinese co-founder Mr Zhang.

TikTok’s US business may be valued at $40 billion to $50 billion, Bloomberg Intelligence estimated last year, a number that could be even higher with its fledgling e-commerce business.

The list of cash or equity buyers is short. Meta Platforms and Alphabet would be hard-pressed to clear an antitrust review.

It is likely that Amazon would, too, since it is a competitor to TikTok Shop. Oracle, TikTok’s current data protection partner and former suitor, is saddled with debt from a past deal.

A stand-alone, private TikTok could also potentially work, purchased with a mixture of cash and debt.

Twitter’s takeover, which included about a third of debt in Elon Musk’s $44 billion purchase, is a recent similar example.

Bloomberg contributed to this report