Yahoo! Inc‘s (NASDAQ:YHOO) 2014 security breach that affected at least half a billion users could have a significant financial impact on its acquisition deal with Verizon Communications Inc. (NYSE:VZ), reports the Washington Post. Citing Craig Silliman, the wireless carrier’s general counsel, the publication also states that Verizon Communications is considering declaring Yahoo’s massive data breach as having had a “material impact” on the web portal’s business. That in general terms means Verizon wouldn’t have offered nearly $5 billion or even made a bid for Yahoo in the first place had it known about the hack earlier.
“I think we have a reasonable basis to believe right now that impact is material,” Silliman explained to reporters yesterday in Washington, DC, adding that Verizon was “looking to Yahoo to demonstrate…the full impact if they believe it’s not. They’ll need to show us that, but the process is in the works.”
Meanwhile, Reuters reports that Silliman didn’t provide any specifics as to whether talks between the two companies were in progress about a price reduction. However, the acquisition deal, which was originally expected to close in the first quarter of FY 2017, does have a clause where Verizon can withdraw in the case of an event that has “adverse effect” on Yahoo’s business, “assets, properties, results of operation or financial condition of the business.”
Yahoo said in a statement after the reports: “We are confident in Yahoo’s value and we continue to work toward integration with Verizon.”
Yahoo’s stock dipped following Silliman’s comments and was down nearly 2% at $41.57 in extended trading Thursday. Verizon remained largely unchanged, closing at $50.29 a share.
The internet pioneer has been dealing with more than just the fallout from the data breach scandal, the scale of which makes it one of the largest data breaches in history. Earlier this month it was revealed that the Sunnyvale, California-based company had developed a custom program, allowing U.S. intelligence agencies to scan hundreds of millions email accounts.
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!