Remember the massive Yahoo security breach that stole information from at least 500 million user accounts? Yeah, Verizon hasn’t forgotten about it either, and today the company says the hack could change its plans to buy Yahoo.
Verizon general counsel Craig Silliman, speaking to reporters at a Washington roundtable, says the breach might be enough for the US carrier to back out of a multi-billion dollar deal to purchase the beleaguered former web giant.
“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,” Silliman said, as reported by Reuters. “If they believe that it’s not then they’ll need to show us that.”
According to the publication, there’s a clause in the deal that lets Verizon vacate if something happens 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.”
Silliman said that while Verizon and Yahoo have discussed the breach, his firm still needs “significant information” before it decides just how material it is.
We asked Yahoo for comment on the developments, and a company spokesperson sent us this statement:
“We are confident in Yahoo’s value and we continue to work towards integration with Verizon.”
In addition to being a huge blow to its reputation, the breach, first disclosed in September, could cost Yahoo a buyout worth $4.83 billion (about £4 billion, AU$6.5 billion).
According to Silliman, it’s still on the table for Verizon to withdraw from the deal if the firm determines enough materiality.
While no decision has been made yet, it’s a serious situation for Yahoo. If Verizon is still willing to go through with the acquisition, it may seek a price renegotiation that could cost Yahoo untold sums.
Or, Verizon could decide it’s not worth it and leave Yahoo alone at the bargaining table. Neither is ideal for Yahoo, though it no doubt has a preferred scenario.