Verizon Said to Near Yahoo Deal at Lower Price After Hacks
(Bloomberg) — Verizon Communications Inc. is close to a renegotiated deal for Yahoo! Inc.’s internet properties that would reduce the price of the $4.8 billion agreement by about $250 million after the revelation of security breaches at the web company, according to people familiar with the matter.
In addition to the discount, Verizon and the entity that remains of Yahoo after the deal, to be renamed Altaba Inc., are expected to share any ongoing legal responsibilities related to the breaches, said the people, who asked not to be identified discussing private information. An announcement of the new agreement could come in a matter of days or weeks, said the people. The revised agreement isn’t final and could still change, they said.
Yahoo, based in Sunnyvale, California, erased an earlier decline on the news, climbing 2 percent to $45.93 at 10:58 a.m. in New York. Verizon slid 0.7 percent to $47.95. Shareholders would have to approve a revised deal.
Yahoo said in December that cyber-thieves in 2013 siphoned information including users’ e-mail addresses, scrambled account passwords and dates of birth. The stolen data may allow criminals to go after more sensitive personal information elsewhere online. The announcement followed news in September of a 2014 breach that affected at least 500 million customer accounts.
Sheila Tran, a spokeswoman for Yahoo, declined to comment.
Last month, Yahoo said the sale would be delayed to the second quarter as the company assesses the impact from the breaches and meets closing conditions. The deal was first announced in July and had been set to wrap in the first quarter of 2017.
Verizon, based in New York, is buying Yahoo for its billion users as it tries to expand beyond a maturing wireless and landline business into mobile media and advertising ventures. Verizon had been seeking either a discount or termination of the deal in the wake of the hacks.
Yahoo Chief Executive Officer Marissa Mayer is under pressure to conclude the deal with Verizon. It was her failure to turn around the company that led to a bidding process that Verizon won in July. Mayer was leading the company when both of the hacks took place.
Yahoo had said it hadn’t been able to identify the “intrusion” associated with the theft by a third party in August 2013. The event was unearthed by forensic experts after law enforcement investigators warned the company about a potential breach.
The attacks on Yahoo’s system have sparked concerns from regulators and prompted lawsuits. In November, the company said it was cooperating with federal, state, and foreign governmental officials and agencies seeking information about the 2014 hack, including the U.S. Federal Trade Commission and the U.S. Securities and Exchange Commission. In December, following the admission of a second hack, a White House spokesman said the Federal Bureau of Investigation was probing the Yahoo hack as well.