Twitter sneak in to buy TikTok; Is a deal possible?

By Rahul Vaimal, Associate Editor
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US-based microblogging and social media company, Twitter has reportedly approached TikTok’s Chinese owner ByteDance to acquire the video-sharing app’s U.S. operations. 

American tech giant Microsoft is still seen as the frontrunner to complete the deal within the 45 days window U.S. President Donald Trump has given ByteDance to agree to a sale.

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

“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.

private equity firm Silver Lake, who is one of Twitter’s shareholders is interested in helping fund a potential deal. The microblogging site 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.

TikTok has come under fire from U.S. lawmakers over national security concerns surrounding data collection. Earlier this week, US President Donald Trump unveiled bans on U.S. transactions with the China-based owners of messaging app WeChat and TikTok, escalating tensions between the two countries.

The US President had said earlier that 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.


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