Saturday, August 29, 2020

Triller joins race to buy TikTok via $20bn bid backed by investment giant | Music Business Worldwide

Another big twist in the TikTok sell-off saga.

For months MBW has been writing about the rapid emergence of rival US-based social short-form video service Triller, which recently claimed 250m worldwide downloads of its app – and is in the middle of a lawsuit against TikTok alleging patent infringement.

Meanwhile, under pressure from the administration of US President Donald Trump, Chinese TikTok parent Bytedance appears resigned to selling off its app’s operations in the United States and certain other territories, including India and Australia.

US-based corporations who have expressed interest in acquiring TikTok’s US operations so far include Microsoft, Oracle and supermarket chain Walmart.

Now, Triller has officially joined this list.

Triller CEO Mike Lu confirmed yesterday (August 28) that his Los-Angeles-based company has made a bid for TikTok with backing from London-based investment firm Centricus Asset Management.

Centricus already oversees a global portfolio with $27bn-worth of assets.

Said Lu: “We believe [Triller and TikTok’s] two teams can work alongside each other and create the best short form video platform. Triller would be the best home for all of TikTok’s users as we have always put product and users first. This is the beginning of a new chapter.”

According to a Bloomberg report, Triller and Centricus’s bid amounts to $20 billion, and would see Triller acquire TikTok’s assets in the US, Australia, New Zealand and India.

The proposal is comprised of $10bn in cash upfront and a further $10bn in profit-sharing from the consequent venture.

“Triller would be the best home for all of TikTok’s users as we have always put product and users first. This is the beginning of a new chapter.”

Mike Lu, Triller

Confusing matters, a TikTok spokesperson said in the wake of Bloomberg’s report that the company had not received a bid from Triller, cheekily asking “What’s Triller?”. Another TikTok spokesperson labelled the deal “preposterous”.

However, Triller Executive Chairman Bobby Sarnevesht explained in response: “We submitted an offer directly to the Chairman of Bytedance through Centricus and have confirmation it was received. We didn’t make an offer to TikTok, they aren’t involved in this at all; we made an offer to Bytedance and are dealing directly with the Chairman only.

“Either people multiple layers down aren’t aware of what is happening on the highest level or they may have their own agendas and aren’t happy about our offer coming in.”

Centricus has also separately confirmed that it has indeed made a bid for TikTok’s operations in the US and some other territories.

TikTok must sell its US assets to an American company before September 20, according to an Executive Order from President Trump. The Order bans Stateside entities from transacting with TikTok if it’s still under Chinese control from that date onwards.

Speaking to Rolling Stone earlier this month, Triller co-owner Ryan Kavanaugh questioned how an acquisition of TikTok by Microsoft in the US could work.

He said: “It’s an impossible deal. From what I understand, the technology of TikTok is located in China. So for Microsoft to acquire it, it needs to transfer that entire protocol, probably millions of lines of code, to the US. There is no possible way that Microsoft could guarantee that whatever Chinese spyware has [allegedly] been embedded into TikTok isn’t still there, even after they transition it — it would take somewhere between two and five years for them to even find it.”

“There’s very few companies that have [the technology required to successfully acquire TikTok in the US] — and the three that do, other than us, have antitrust issues.”

Ryan Kavanaugh, Triller/Proxima Media (speaking earlier this month)

Kavanaugh added: “The only possible way we see something like this working is if [Microsoft] doesn’t actually buy the app: you buy the goodwill, you buy the name, but you use another app that looks, feels and acts like it. Then you rescan it and call it TikTok, and you tell everybody in the US, ‘Hey, by the way, re-download TikTok,’ after it’s taken off the App Store for an hour.

“So that what they’re downloading has all the same functionality and the same feel, but was never in China. Microsoft doesn’t have that [ability]. There’s very few companies that do have it — and the three that do, other than us, have antitrust issues.”Music Business Worldwide


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