Twitter going to Buying TikTok US Operations
Twitter has approached for buying TikTok
Twitter has approached TikTok’s Chinese owner ByteDance to precise interest in acquiring the US operations of the video-sharing app, two people conversant in the matter told Reuters, as experts raised doubts over Twitter’s ability to mobilize together financing for a possible deal.
It is faraway from certain that TWITTER would be able to outbid Microsoft and complete such a transformative deal within the 45 days that US President Donald Trump has given ByteDance to comply with a sale, the sources said.
The news of Twitter and TikTok being in preliminary talks and Microsoft still being seen as the front-runner in bidding for the app’s US operations was reported earlier by the Wall Street Journal.
Twitter need to raise additional capital to fund the deal
Twitter features a market capitalization of on the brink of $30 billion (23 billion pounds), almost the maximum amount because the valuation of TikTok’s assets to be divested, and would wish to boost additional capital to fund the deal, news from the sources.
“Twitter will have a tough time producing enough financing to accumulate even the U.S. operations of TikTok. It doesn’t have enough borrowing capacity”, said Erik Gordon, a professor at the University of Michigan.
“If it (Twitter) tries to put together an investor group, the terms are going to be tough. Twitter’s own shareholders might prefer that management specialise in its existing business”, he added.
One of Twitter’s shareholders, private equity firm Silver Lake, is curious about helping fund a possible deal, news from the sources.
Twitter has also privately made a case that its bid would face less regulatory scrutiny than Microsoft’s, and can not face any pressure from China as long as it’s not active therein country, the sources said.
TikTok, ByteDance and Twitter declined to comment.
TikTok has come under attack from U.S. lawmakers over national security concerns surrounding data collection.
Trump unveiled bans on U.S. transactions for WeChat and TikTok
Earlier in the week, Trump unveiled bans on U.S. transactions with the China-based owners of messaging app WeChat and TikTok, escalating tensions between the 2 countries.
Trump said in the week he would support Microsoft’s efforts to buy TikTok’s U.S. operations if the U.S. government got a “substantial portion” of the proceeds. He nevertheless said he will ban the favoured app on Sept. 15.
Microsoft said on Sunday it had been getting to conclude negotiations for a deal by mid-September.
