Verizon Wants to Shave $1 Billion Off Yahoo! Acquisition
In the wake of the massive—and embarrassing—Yahoo! Credentials breach, Verizon is reportedly pushing for a $1 billion discount off its pending $4.8 billion acquisition offer for the company.
According to sources speaking to the New York Post, the reveal two weeks ago that 500 million Yahoo! user accounts had been compromised has lessened Verizon’s enthusiasm for the buy. Verizon has been planning to merge Yahoo! assets with AOL to create a Google-scale competitor (with a 1-billion consumer reach) in the digital space.
“In the last day we’ve heard that [AOL boss] Tim [Armstong] is getting cold feet. He’s pretty upset about the lack of disclosure and he’s saying, ‘Can we get out of this or can we reduce the price?’” one source told the Post.
Armstrong is deep in negotiations with Yahoo! for a price reduction, a source said. “Tim was out there this week laying the law down and [Yahoo CEO] Marissa [Mayer] is trying to protect shareholders,” said a source close to talks. “Tim knows how to be fair, while Verizon is pushing him, he can bridge the gap.”
The discount would offset a $1 billion reserve that Verizon could earmark to fund possible liabilities associated with the Yahoo email hack. “They’re being cautious because they don’t know what they’re going to find,” the person said.
Yahoo! is reportedly having none of it, and is making a case that the telco has no legal avenue to change the terms of the acquisition deal.
Yahoo! and Verizon declined comment on the Post’s story.
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Source: Information Security Magazine