Verizon, Yahoo Near Revised Deal That Cuts Price -- Update
February 15 2017 - 1:01PM
Dow Jones News
By Ryan Knuston and Deepa Seetharaman
Verizon Communications Inc. and Yahoo Inc. are near a revised
transaction that would reduce the price Verizon would pay for the
internet company's core business by about $300 million, a person
familiar with the matter said.
The two companies also are discussing an agreement to share any
future liabilities as a result of two massive data breaches Yahoo
disclosed after the companies struck their original $4.8 billion
deal in July, people familiar with the matter said.
An agreement could come even though Verizon's investigation into
the breaches isn't complete, one of the people said. Executives at
the telecommunications company want to move forward despite some
remaining uncertainty to get to work on integrating Yahoo with its
AOL unit, the person said.
If the two sides can agree soon on a revised transaction, the
deal could close in April, one person said. But an investigation
under way at the Securities and Exchange Commission about what
Yahoo knew about the data breaches and when, and whether it
properly informed investors, could slow that timeline. Before Yahoo
can schedule a shareholder vote on the deal, it needs the SEC to
approve its proxy statement.
Investors remain optimistic the deal will go through. Shares of
Yahoo gained 1.3% to $45.62 in afternoon trading, after CNBC
earlier reported that the two sides were near a revised
agreement.
In addition to concerns about damage to Yahoo's brand, Verizon
believes some of Yahoo's systems have been compromised by the two
hacks and they will be difficult, if not impossible, to integrate
with AOL, one of the people said.
In September, Yahoo disclosed a massive breach that took place
in 2014 and affected more than 500 million accounts. The stolen
data included names, email addresses, dates of birth, telephone
numbers and encrypted passwords, Yahoo said.
By November, Verizon said it believed the breach didn't harm
user engagement and was prepared to move forward with an agreement
to share future liabilities from the hack, people familiar with the
matter said.
Then in mid-December, Yahoo said it was hit with a different
massive data breach in 2013 that compromised private information of
more than one billion user accounts. After the second breach,
Verizon conducted its own brand studies and had deeper technical
conversations with Yahoo about its systems, one of the people
said.
By agreeing to close the deal, Verizon will give up its right to
sue over the idea that Yahoo had covered up the hacks, one of the
people said.
If the two sides reach a deal, the remaining company would be
called Altaba Inc. and contain Yahoo's stake in Alibaba Group
Holding Ltd. and Yahoo Japan.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
February 15, 2017 12:46 ET (17:46 GMT)
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