Oracle chair Larry Ellison. Picture: REUTERS
Oracle chair Larry Ellison. Picture: REUTERS

San Francisco — Oracle, the world’s second-largest software maker, is weighing a surprise bid for part of TikTok’s business, seeking to rival Microsoft in the race to acquire the viral video streaming app, according to people familiar with the matter.

The company, controlled by billionaire Larry Ellison, has made a preliminary approach to other parties, including the venture capital firm Sequoia Capital, to partner with it in a bid for the app’s operations in the US, Canada, Australia and New Zealand, the people said, asking not to be identified.

It isn’t clear why Oracle, which focuses on business customers and has virtually no investments in consumer apps or social media, would want to acquire TikTok. However, co-founder Ellison is one of the few Silicon Valley moguls to openly support President Donald Trump. Ellison, whose company was once among the industry’s most aggressively acquisitive, hosted a fundraiser at his estate for the US president in February.

Oracle’s entry would challenge Microsoft’s bargaining position, as the company had been the only party to publicly confirm it was in talks with TikTok owner ByteDance. On Friday, Trump ordered ByteDance to sell its US assets within 90 days, adding to an earlier executive order that would prohibit US people and companies from doing business with TikTok effective 45 days from August 6.

Oracle didn’t immediately respond while ByteDance declined to comment when contacted. Sequoia, a venture investor in ByteDance, also declined to comment. The Financial Times reported on the talks earlier.

The potential bid makes “little strategic sense”, said Anurag Rana, a Bloomberg Intelligence analyst, “given its sub-scale cloud business and TikTok’s lack of synergies with its core database or applications products.”

Oracle’s shares were up 2.8% in pre-market trading in New York Tuesday.

Valued at roughly $166bn, Oracle held about $43bn in cash or near equivalents as of the end of May, making it one of few companies that could potentially afford the lofty price tag for TikTok. Analysts and bankers have estimated the value of TikTok’s US business at between $20bn and $50bn, a wide range that reflects the complexity involved in separating TikTok’s American and global businesses.

ByteDance bought the Musical.ly app in 2017 and merged it with TikTok, creating an app with more than 100-million users in the US alone. That deal is being unraveled by US officials, which have cited national security concerns amid escalating tensions between Washington and Beijing. Now, the company is facing a fast-approaching deadline to reach a deal, or risk facing a complete shutdown of its American business.

Other bidders potentially interested in the assets include Twitter. The social media company is among US tech firms that have also explored possible bids though it’s unclear how far those talks have gone, according to multiple people familiar with the deliberations.

Bloomberg

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