(Bloomberg) -- Verizon Communications Inc. Chief Executive Officer Lowell McAdam suggested a price cut of as much as $925 million for the deal to buy Yahoo! Inc.’s internet assets after revelations of massive online security breaches surfaced last year, according to a regulatory filing.
McAdam also suggested killing off the deal before the price was eventually reduced by $350 million to $4.475 billion, according to the filing on Monday. A third option -- which was discussed Feb. 1 -- was for Verizon to complete an investigation over the next several months, after which the company would decide how to proceed.
Before the revised deal, a Yahoo board committee discussed "the prospect that proposals received in the original sale process would continue to be available" if Verizon terminated the deal. Also, during a board meeting a reverse spinoff was brought up. Verizon and Yahoo had agreed to the acquisition in July after months of negotiations.
On Feb. 9, McAdam and Thomas McInerney, a Yahoo board member, met in Verizon’s offices in New York City. McInerney said the price at the high end would not work, the filing said.
"After further discussion, Mr. McAdam and Mr. McInerney each agreed to review with their respective boards of directors a proposal that included a purchase price reduction in the amount of $350 million," the filing said.
Yahoo -- under the leadership of Marissa Mayer -- agreed to the sale of the company’s core internet assets last year after a turnaround effort fizzled. Yet the deal was thrown into question after the Web portal revealed massive hacks during her tenure that exposed hundreds of millions of users’ online information. The revised deal came after a Feb. 13 phone meeting in which the Yahoo board reviewed a financial update for 2017, 2018 and 2019, the filing said. The final deal, slicing the price by $350 million, was approved Feb. 20.
Mayer, while giving up her bonus after the hacks, is set to receive $23 million in compensation as part of the planned acquisition by Verizon, Monday’s filing said.
Mayer would get about $3 million in cash and nearly $20 million in equity, along with almost $25,000 in benefits, as part of a change in control provision, according to the filing. That’s based on estimates for a closing date of March 8 -- and is down from an estimated packaged of $44 million, according to a filing in September.
She received no cash bonus last year and agreed to forgo her annual bonus and annual equity grant this year. The deal is set to wrap up in the second quarter, Yahoo has said.
As part of the deal, Yahoo’s valuable stakes in Asian assets will not be sold to Verizon. Instead they will remain in an entity that will be called Altaba Inc. and will be publicly traded on Nasdaq, according to the filing. It will consist primarily of Yahoo’s equity investments, short-term debt investments and cash. Also, the filing noted that the value of a patent portfolio called Excalibur is $740 million and that McInerney will serve as Altaba’s CEO.