Verizon-Yahoo Deal: Can Verizon Just Walk away?

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yahoo-76684__180Yahoo’s security breach raises questions about Verizon’s $4.8 billion purchase of the company. Now, experts are debating whether the price should drop or if Verizon should just walk away.

Verizon General Counsel Craig Silliman raised doubts about the agreement in its current form in a meeting with reporters Thursday, reported the Wall Street Journal. He said it was “reasonable” to believe the data breach could be characterized as a “material event” that could allow Verizon to change the terms of the acquisition.

It’s now up to Yahoo to prove otherwise, Silliman said. Verizon is waiting for results of Yahoo’s investigation into the breach before deciding how to proceed, a source told the WSJ.

“We are confident in Yahoo’s value and we continue to work towards integration with Verizon,” stated a Yahoo spokesman in response to Silliman’s comments. Yahoo declined to comment on its outreach to investors about the matter. 

The hack occurred in 2014 and affected 500 million accounts. Hackers stole names, email addresses, birthdates, telephone numbers and encrypted passwords. Yahoo disclosed the hack last month, after its deal with Verizon was reached, reported Politico.

In a piece titled “Verizon Ready to Admit That It Got Totally Catfished by Yahoo,” Dealbreaker writes: “So bad is the timing that Verizon can now pull out of the deal that it maybe never should have entered into in the first place.” However when asked about that, Verizon CEO Lowell McAdam said the carrier doesn’t plan to walk away from the transaction, however he didn’t rule out seeking changes to the terms, the WSJ reported.

The companies anticipated closing the deal in the first quarter of 2017 before the hack was disclosed. The FTC has cleared the transaction, the companies are awaiting approval from the European Commission, and the SEC is reviewing the proxy filing, according to Politico.

October 17, 2016

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