Twitter Inc (TWTR.N) 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 (MSFT.O) 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.
Reuters
