Proactive Investors - Microsoft Corp (NASDAQ:MSFT) and Oracle Corp (NYSE:NYSE:ORCL, ETR:ORC) are the most likely buyers of TikTok in the US should its owner be forced to sell it, some analysts believe.
It comes as the US government closes in on forcing Chinese owner ByteDance to divest the US operations of the social media app or face a Stateside ban.
Over the weekend a foreign policy bill that included updated language on the measures for TikTok, was passed by the House of Representatives, meaning it will now go to the US Senate.
The updated bill extends the period for ByteDance’s divestment to a year, up from the proposed six months previously.
President Biden has said he would approve the legislation as soon as it reaches his desk – the next step after Senate approval.
The “likely buyers" for TikTok Global, according to analysts at brokerage Wedbush, are Microsoft or Oracle, (already the partner of TikTok's Project Texas) due to both companies having shown interest previously and that strategically it is “a logical fit.”
“A number of private equity and consortiums would also clearly put together bids for this asset with Former Treasury Secretary Steven Mnuchin among many that have shown early interest for this key asset,” the tech analysts added.
However, Wedbush remains uncertain on what exactly would go under the hammer should ByteDance concede and sell up.
“We see no chance TikTok would be sold with the algorithm as Beijing and ByteDance would never allow that to happen in our view,” the US broker added.
Wedbush believes the value of TikTok will dramatically change without its algorithms and if this happens it will make a sales process a “very complex endeavour”.
Additionally, “a myriad of legal challenges” are likely to be ByteDance’s response should the bill be passed, meaning it could be some time until a sale process begins.