Verizon and Yahoo Might Be Nearing a Cheaper Deal

Verizon and Yahoo Might Be Nearing a Cheaper Deal

After the disclosing of the two humongous data breaches in Yahoo threatened of upending the $4.8B deal Yahoo had with Verizon Communications, the company’s future seemed to look glim.

There was a chance that Yahoo could fight Verizon in a court in Delaware to preserve the preset price tag, which could have led to a lot of months of legal wrangling. This strategy also had the risk of Verizon walking away from the whole deal altogether.

But according to a source, Yahoo is trying to renegotiate the deal wbyith giving a discount of $300M of the price to save the sale.

The two companies will share costs and legal responsibility for the data breaches under the newly revised terms. The source also added that this new deal would be announced in a few days.

After the renegotiation report, Yahoo shares surged and closed up 1.4% on Wednesday.

There were no comments from representatives of both companies on these discussions.

Yahoo also disclosed more information about the breaches by notifying some of their users that they had evidence of login attempts with using a password. These were made using stolen data in the hack of 2014.

Although Yahoo didn’t ask users to change the passwords, it urged them to use an account key, which was an optional feature that uses smartphone to validate all login attempts to the account.

The executives of Verizon had mused earlier publicly on Yahoo breaches’ severity and whether they had any effect on the deal between the companies, which was announced in July.

However, a lot of analysts said that the telecommunications giant Verizon had a lot of reasons for completing the transaction as soon as possible, mainly because of building up their digital media business.

Verizon’s rivals like AT&T, T-Mobile, and Sprint are hurting its core business, the wireless phone service. Due to the offerings by the competition, Verizon was forced recently to bring the unlimited data plans back.

Salvaging this deal was a lot more vital for Yahoo as compared to Verizon.

They put their core internet business, which included their popular email service, sports arms, and Yahoo Finance up for sale the previous year by which they believed to end questions going on for years about their business declining and whether the turnaround could be affected. Also with high investor discontent and a succession of CEOs most recently being Marissa Mayer, all tried but failed in bringing back Yahoo.

Stockholders are also eager for this deal to close so that Yahoo can focus on extracting value of its stake of 15% in Alibaba and 36% Yahoo Japan stake.

These investments are going to be under a stub company known as Altaba with a combined worth of $48B.

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