Verizon Pares Price Of Yahoo Acquisition -- WSJ
February 16 2017 - 3:02AM
Dow Jones News
By Ryan Knutson and Deepa Seetharaman
Verizon Communications Inc. and Yahoo Inc. are closing in on a
revised deal that would reduce the price Verizon would pay for the
internet company's core business by about $300 million, people
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.
Separately, Yahoo said it is notifying users this week whose
accounts it believes were compromised over the past two years by
hackers forging digital files called cookies. That episode, first
disclosed in December, is in addition to the two big data breaches.
Yahoo didn't say how many users it is notifying.
The two sides could agree on a revised transaction within a
week, which would allow the deal to close in April, people familiar
with the matter 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 1.4% to $45.65 on Wednesday, after CNBC earlier in the
day reported 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 data
breaches and 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 data breach in 2013 that compromised private information
of more than one billion user accounts.
After the second disclosure, 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 would give up its right
to sue over the idea that Yahoo had covered up the hacks, one of
the people said.
If the deal goes through, the remaining company would be called
Altaba Inc. and contain Yahoo's stake in Alibaba Group Holding Ltd.
and Yahoo Japan.
Write to Ryan Knutson at ryan.knutson@wsj.com and Deepa
Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
February 16, 2017 02:47 ET (07:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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