By Dawn Chmielewski, Katie Paul and Kane Wu

(Reuters) – Private equity firm Blackstone is evaluating taking a small minority investment in TikTok’s U.S. operations, according to two people familiar with the matter.

Blackstone is discussing joining ByteDance’s existing non-Chinese shareholders, led by Susquehanna International Group and General Atlantic, in a bid for TikTok’s U.S. business. The group has emerged as front-runners.

Their proposal entails spinning off TikTok’s U.S. operations into a separate entity and diluting Chinese ownership in the new business to below the 20% threshold required by U.S. law.

(Reporting by Dawn Chmielewski in Los Angeles, with additional reporting from Katie Paul and Krystal Hu in New York and Kane Wu in Hong Kong; editing by Kenneth Li and Marguerita Choy)