Twitter Inc has approached TikTok’s Chinese owner ByteDance to express interest in acquiring the U.S. operations of the video-sharing app.
According to Reuters, the talks are ongoing, but 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 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.
Twitter has a market capitalisation 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.
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“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.
