Doesn’t look too good for the Yahoo takeover bid by Verizon—the telecom giant has indicated it might yet pull out of plans to buy the tech giant. This is not unconnected with the recent massive data breach, which affected millions of accounts. Verizon agreed a $4.8 billion deal to buy Yahoo a couple of weeks back, but that may be put on hold going by the company’s recent statement.
On Thursday, Verizon said that the massive data breach disclosed a couple of weeks back was a huge occurrence that could put on hold its $4.8 billion purchase plan for Yahoo’s core business, reports the Washington Post.
“I think we have a reasonable basis to believe right now that the impact is material,” Verizon General Counsel Craig Silliman said of the breach, speaking to a small group of reporters at a roundtable. A “material” effect in this case is one that would harm Yahoo’s financial value, and make the Web giant less attractive to purchase.
Perhaps, Yahoo could still prove to the telecom company that damages caused by the massive data breach hasn’t eaten deep into its value—and that is precisely what Verizon wants the tech giant to do. “We’re looking to Yahoo to demonstrate to us the full impact they believe it’s not,” Silliman said. Citing analysts, the Washington Post reports that failing to meet or convince Verizon could trigger an escape clause in the agreement reached by the two parties when the deal was struck. In other words, failure to keep to the terms of agreement could lead to back out on the side of Verizon.
Yahoo is, however, confident that its core value is still very much intact. The company in a statement said: “We are confident in Yahoo’s value and we continue to work toward integration with Verizon.”
Yahoo had in a statement last September, admitted a massive data breach in its network. “We have confirmed that a copy of certain user account information was stolen from the company’s network in late 2014 by what it believes is a state-sponsored actor. The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers.”
The company in the same statement revealed that nothing less than 500 million user accounts was stolen. The company, however, said investigation it carried out showed that “no evidence that the state-sponsored actor is currently in Yahoo’s network. Yahoo is working closely with law enforcement on this matter,” Yahoo said.
There is still no proof that Verizon intends to completely pull out of the deal, but both parties could be forced to head back to the bargaining table if the telecom company feels unsatisfied with Yahoo’s explanation.
The New York Post had last week reported that Verizon could seek a $1 billion discount on the deal, but that was dismissed earlier this week by Verizon’s chief executive Lowell McAdam as “total speculation.”