Security breach may provide Verizon with a way out of $4.8 billion Yahoo acquisition

Shawn Knight

TechSpot Staff
Staff member

Verizon in July agreed to purchase Yahoo for approximately $4.83 billion in cash. The following month, a well-known hacker that goes by the handle Peace offered up the login credentials of 200 million Yahoo accounts on a dark web marketplace for three Bitcoins (around $1,800 at the time).

Yahoo said it was aware of the alleged breach but it wasn’t until late September that the Internet pioneer came forward with details on the matter.

As it turned out, it wasn’t just 200,000 accounts that had been stolen but rather, at least 500,000 which could put the entire deal in jeopardy.

On Thursday, Verizon general counsel Craig Silliman said during a roundtable in Washington that he thinks they have a reasonable basis to believe that the impact is material and that they’re looking to Yahoo to demonstrate to them the full impact. Silliman added that if Yahoo believes the impact is not material, they’ll need to show it to them.

In other words, that means the situation may trigger a clause in the original agreement that could let Verizon back out of the transaction. Specifically, the clause says that Verizon can exit the deal if a new event “reasonably can be expected to have a material adverse effect on the business, assets, properties, results of operation or financial condition of the business.”

When asked about the matter, a Yahoo spokesperson told Reuters that they are confident in Yahoo’s value and continue to work towards integration with Verizon.

Silliman told the publication that Verizon has already gained approval from the Federal Trade Commission and is awaiting word back from the European Commission and the U.S. Securities and Exchange Commission.

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Darth Shiv

TS Evangelist
So if that were true and Verizon backs out, does the executive team actually get held accountable for *anything*? This is now nothing to do with how Yahoo's share value has tanked since Google outmaneuvered them. This is their culpability for failing to implement security practices on a core part of their business which has now probably crushed their market value.
 

Uncle Al

TS Evangelist
And, as you said, the value of the company is much diminished thus allowing them to claim the stock has been vastly devalued and offer a pittance of a sum. Yahoo could accept, but all in all, they are pretty much sunk or at least taking on water faster than they can bail it!
 

Kenrick

TS Evangelist
I hate what they did with yahoo sports. Lot sponsored articles everywhere in the page. Before it was so simple to read an article, now I have to click an article and click again "go to the article". It's annoying.
 

bluto 2050

TS Addict
Marissa Mayer and a dysfunctional board that hired her have made a fine mess of it and prior to Mayer Microsoft made an unsolicited $44.6 billion cash and stock bid in Feb. 2008 and now they wont get 1/10 of that for the web portal ,search ,ads and e mail .
 
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Endarial

TS Booster
Just a correction for the article. It mentions 200,000 and 500,000 as the amount of accounts that were breached. It should be 200,000,000 and 500,000,000.
 
R

RustyTech

Just a correction for the article. It mentions 200,000 and 500,000 as the amount of accounts that were breached. It should be 200,000,000 and 500,000,000.
$500 million?

Edit: Kinda sad for Yahoo..