Yahoo is said to be near revised deal with Verizon
ASSOCIATED PRESS
If completed, a revised agreement with Verizon would help Yahoo focus on finding ways to extract the value of its 15 percent stake in Alibaba and its 36 percent stake in Yahoo Japan.
SAN FRANCISCO >> Soon after Yahoo disclosed the first of two enormous data breaches that threatened to upend a $4.8 billion deal it had reached with Verizon Communications, the embattled company began to confront an unpleasant potential future.
Yahoo could have battled Verizon to preserve the original price tag, a campaign that could have ended up in a Delaware courtroom and led to months of bitter wrangling. Moreover, that strategy would have run the risk of allowing Verizon to walk away from the purchase altogether.
Instead, Yahoo is close to renegotiating its original deal, choosing to take close to $300 million off the price to preserve the sale, a person with knowledge of the matter said Wednesday.
Under the revised terms, the two companies are expected to share legal responsibility and costs for the data breaches, the person with knowledge of the matter said. The new deal is expected to be announced within days, this person added.
Shares of Yahoo, which had been trading lower Wednesday, surged after Bloomberg reported the renegotiations. The shares closed up 1.4 percent.
Representatives for both companies declined to comment on the discussions.
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Verizon executives had earlier mused publicly about the severity of the Yahoo breaches and whether they had a material effect on the companies’ deal, announced in July.
Analysts, however, said Verizon, a telecommunications giant, had plenty of reasons to complete the transaction quickly, particularly to build up its digital media business.
For Yahoo, salvaging the deal was even more vital. In putting its core internet business — including its still-popular email service, Yahoo Finance and sports arms — up for sale last year, the company sought to end years of questions about its declining business and whether it could effect a turnaround.
Yahoo stockholders are eager to see the deal close so that Yahoo can focus on finding ways to extract the value of its 15 percent stake in Alibaba, China’s largest e-commerce company, and its 36 percent stake in Yahoo Japan, an affiliated company controlled by SoftBank Group.
Those investments, which are supposed to remain in a stub company called Altaba, are worth about $48 billion combined.
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