Yahoo Hack Could Affect $4.8B Deal, Says Verizon Executive
"We have a reasonable basis to believe right now that the impact is material, and we're looking to Yahoo to demonstrate to us the full impact," says the telecom giant's general counsel.
A Verizon Communications executive on Thursday said that there was a "reasonable basis" for the telecom giant to believe that the recently unveiled news of a hack of at least 500 million Yahoo email accounts has a material impact and could affect its planned $4.83 billion acquisition of the technology firm.
"I think we have a reasonable basis to believe right now that the impact is material, and we're looking to Yahoo to demonstrate to us the full impact," Reuters quoted Verizon's general counsel Craig Silliman as saying in Washington. "If they believe that it's not, then they'll need to show us that."
He also said that Verizon has been preliminarily briefed on the incident by Yahoo, but expects more "significant information" before being able to say how material the effect would be. He concluded that Verizon "will make determinations about whether and how to move forward with the deal based on our evaluation of the materiality."
Some observers took that as a sign that Verizon could decide to look to get out of the deal. The Yahoo acquisition agreement includes a clause allowing Verizon to withdraw in the case of an event that "reasonably can be expected to have a material adverse effect on the business, assets, properties, results of operation or financial condition of the business."
Some analysts suggested Verizon may simply look to get a better price. Silliman didn't say if the companies were renegotiating the acquisition price, according to the report. Some observers have said the Yahoo hack could cause such fallout as increased security spending and litigation.
"We are confident in Yahoo’s value, and we continue to work towards integration with Verizon," a Yahoo spokesman told Reuters.
Verizon previously said that it has "limited information and understanding of the impact," adding: "We will evaluate as the investigation continues through the lens of overall Verizon interests, including consumers, customers, shareholders and related communities."
Yahoo disclosed the 2014 data breach last month, saying that it had learned about it this summer and that it had compromised users’ names, email addresses, telephone numbers, dates of birth and encrypted passwords.