The Classy Investors

  /  Top News   /  Twitter expressed interest in buying TikTok’s U.S. operations

Twitter expressed interest in buying TikTok’s U.S. operations

imageTechnology9 hours ago (Aug 09, 2020 05:50AM ET)

2/2

(C) Reuters. FILE PHOTO: A TikTok logo is displayed on a smartphone in this illustration

2/2

By Greg Roumeliotis and Kanishka Singh

(Reuters) – Twitter Inc (N:TWTR) has approached TikTok’s Chinese owner ByteDance to express interest in acquiring the U.S. operations of the video-sharing app, two people familiar with the matter told Reuters, as experts raised doubts over Twitter’s ability to put together financing for a potential deal.

It is far from certain that Twitter would be able to outbid Microsoft Corp (O:MSFT) and complete such a transformative deal in the 45 days that U.S. President Donald Trump has given ByteDance to agree to a sale, the sources said on Saturday.

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 U.S. operations was reported earlier by the Wall Street Journal.

Twitter has a market capitalization of close to $30 billion, almost as much as the valuation of TikTok’s assets to be divested, and would need to raise additional capital to fund the deal, according to the sources.

“Twitter will have a hard time putting together enough financing to acquire 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 will be tough. Twitter’s own shareholders might prefer that management focus on its existing business”, he added.

One of Twitter’s shareholders, private equity firm Silver Lake, is interested in helping fund a potential deal, one of the sources added.

Twitter has also privately made a case that its bid would face less regulatory scrutiny than Microsoft’s, and will not face any pressure from China given that it is not active in that country, the sources said.

TikTok, ByteDance and Twitter declined to comment.

TikTok has come under fire from U.S. lawmakers over national security concerns surrounding data collection.

Earlier this week, Trump unveiled bans on U.S. transactions with the China-based owners of messaging app WeChat and TikTok, escalating tensions between the two countries.

Trump said this 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 popular app on Sept. 15.

Microsoft said on Sunday it was aiming to conclude negotiations for a deal by mid-September.

Twitter expressed interest in buying TikTok’s U.S. operations

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.