US telco giant Verizon is reportedly changing the terms of its pending Yahoo buyout following the two massive security breaches that have since plagued the internet giant, starting in 2013.
The carrier is reportedly close to a revised deal that would lower the price for Yahoo by US$250 million, Bloomberg reported Wednesday citing people familiar with the matter.
Verizon agreed to acquire Yahoo for US$4.83 billion in July 2016. In September, Yahoo confirmed a 2014 security breach that impacted more than 500 million user accounts on its network. Later, news also surfaced around a separate hack in which cyber criminals compromised e-mail addresses, birthdays, and scrambled passwords of more than 1 billion user accounts in 2013, the largest hack to date, according to industry analysts.
While Verizon executives have since said it would be evaluating the implications of the breach and the subsequent investigation, it was unclear whether Yahoo or Verizon was aware of the scope of either large-scale hacks before inking the acquisition deal.
The reported renegotiations follow months of speculation on whether Verizon would attempt to either revise the deal or walk away from the purchase entirely.
For its part, Yahoo said it has been working with the U.S. Federal Trade Commission and the Securities and Exchange Commission seeking information following the confirmation of the second breach.
Verizon hasn't closed its investigation of the breaches and declined to comment on the reports of a discounted Yahoo deal when reached by CRN.
In addition to the renegotiated price tag, both Verizon and Altaba, Inc., the remaining assets of Yahoo following the close of the acquisition, are expected to share any ongoing legal responsibilities related to the security breaches, the Bloomberg report said.
Verizon is purchasing Yahoo for its media assets, including its sports and finance content which is still popular with millions of users today. The acquisition will help Verizon bolster its content strategy as the carrier continues to expand its portfolio past its landline and wireless businesses into the mobile media space.
Following reports of a revised deal, Yahoo's stock jumped US$0.57 (1.27%) to US$45.59 early Wednesday afternoon, while Verizon slipped down US$0.30 (0.61%) to US$47.98. Shareholders for both companies would have to approve any changes to the acquisition deal.