Twitter indicates interest in TikTok acquisition.
Embattled TikTok ,which has come under fire from US lawmakers over national security concerns surrounding data collection has now become a beautiful bride.
Twitter has now made offer to owner, ByteDance for TikTok acquisition, according to reports, indicating interest in buying the US operations of the video-sharing app, private sources familiar with the matter told Reuters.
However, analysts are of the opinion that it will be a herculean task for Twitter to outbid Microsoft, and conclude the mega deal in 45 days, as directed by US President, Donald Trump.
Twitter has reached a market capitalization of around $30 billion, almost as much as the same valuation of TikTok’s US operation.
Twitter faces the ordeal of raising additional funds before the deal could see the light of day.
“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 major shareholders, private equity firm Silver Lake, is however interested in supporting Twitter in part for the required funds needed to pull the deal through, one of the sources to Reuters 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.
