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Verizon Could Alter or Kill Yahoo Deal After Second Hacking Disclosure

Variety logo Variety 12/15/2016 Janko Roettgers
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Yahoo’s new revelations of a second hacking incident that may have impacted as many as one billion accounts once again raises doubt about Verizon’s plans to acquire the internet company: Verizon is looking to pay less for the internet company in light of Yahoo’s disclosure, or even exit the deal altogether, according to Bloomberg.

Verizon is still working on laying the groundworks for integrating Yahoo into the company, but it also has a team working on other options, including possible exit scenarios, according to that report. A key concern for Verizon seems to be any future legal liabilities the company could inherit through the acquisition.

This isn’t the first time Verizon’s proposed $4.83 billion acquisition of  Yahoo looked to be in jeopardy. Reports about possible efforts to cut the price tag by as much as $1 billion first surfaced in October after Yahoo was forced to endure a separate hacker intrusion that had affected as many as 500 million accounts.

At the time, Verizon CEO Lowell McAdam publicly downplayed the notion that the deal was in jeopardy, telling attendants of an industry conference that any such reports were “pure speculation.” Curiously, McAdam also went on the record to say that he was “not that shocked” about the exploit, and basically argued that hacks like these happen all the time.

But just a few days later, Verizon’s general counsel Craig Silliman reversed course, telling reporters that the hack likely was a material event that could impact the deal.

At the end of October, Verizon’s EVP for Product and New Business Innovation Marni Walden went on the record to say that the company was still waiting for answers from Yahoo. Walden said that Verizon was hoping to conclude its evaluation of the deal within 60 days, which would mean that the company planned to forge a decision before the end of the year.

That timeline could be in jeopardy with Yahoo’s new disclosures. But the newly-disclosed hack could also lead to more pressure from investors to significantly cut the price tag of the deal, or walk away from it altogether. Yahoo’s stock was down close to 5% on Thursday following the disclosures.

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