2 December, 2021

Twitter is showing interest in the purchase of TikTok

Twitter has approached TikTok's Chinese owner ByteDance to express an interest in buying its US operations, according to reports.

Twitter has approached TikTok’s Chinese owner ByteDance to express interest in acquiring the US 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.

Last Friday, Mr Trump ordered US firms to stop doing business with the Chinese app within 45 days. The Trump administration claims that the Chinese government has access to user information gathered by TikTok, which the firm has consistently denied.

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 US operations was reported earlier by the Wall Street Journal.

Twitter has a market capitalisation of close to $30 billion (23 billion pounds), 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.

In response to the US president’s executive order, TikTok has threatened legal action against the US saying it was “shocked” by the move.

The US government also unveiled a ban on Chinese-owned messaging app WeChat as tensions escalate between the two countries.

Mr Trump said last week he would support Microsoft’s efforts to buy TikTok’s US operations if the government got a “substantial portion” of the proceeds.

He has set a deadline of 15 September for the deal to be completed or the ban will go ahead.

Microsoft said it “will move quickly to pursue discussions” for TikTok’s operations in the US, Australia, Canada and New Zealand.

“Even if the deal goes through, be it Microsoft or Twitter taking a substantial stake in TikTok, what remains to be seen is how both parties are going to move forward operationally,” said communications expert Sharon Koh.

“It will also take a tumultuous effort for both organisations to meander through the political sensitivities,” she added.