Verizon Communications Inc. is reconsidering the planned purchase of Yahoo. This is revealed by a counsel for Verizon. It definitely has something to do with at least 500 million Yahoo accounts hacked revealed last month.
Verizon Has A Reasonable Basis
Craig Silliman, Verizon's general counsel, has recently talked about the impact of Yahoo's data breach. Verizon has a reasonable basis to believe that the email hack may affect a clause in their $4.83 billion deal with Yahoo.
Silliman also revealed that they are looking into it. Whether or not they pursue on purchasing Yahoo depends on the result of their evaluation. Verizon Chief Executive Lowell McAdam disclosed that the investigation is 50 to 60 percent complete, according to The Washington Post.
The clause says that Verizon can withdraw, according to Reuters. This is possible when an event occurs that could be detrimental to the business.
He added that Yahoo has to establish that the said breach is not unfavorable.
A Yahoo spokesman reassured that they are going to continue their negotiation with Verizon. Yahoo said that they are confident in its own value.
Verizon's Acquisition Of Yahoo
Silliman admitted that Verizon had already talked to Yahoo about the hacking. But the company may need more information before they could actually decide.
Verizon's acquisition of Yahoo has been approved by the US Federal Trade Commission. However, it still requires approval from the European Commission. Silliman further said that the proxy is being reviewed by the US Securities and Exchange Commission.
A Cheaper Purchase For Verizon
Analyst Roger Entner said that Verizon might be trying to acquire Yahoo for a cheaper price. He also mentioned that Yahoo should have properly disclosed the data breach.
Now, Yahoo has to make sure that the negotiation will end well. They have to convince Verizon that they are still worth that much.
