Verizon May Seek Discount or Exit From Yahoo Deal (Report)

The telecom giant is rethinking its proposed merger after news of the latest Yahoo hack

Verizon is re-evaluating its options one day after Yahoo, the fading internet pioneer it agreed to acquire earlier this year for $4.8 billion, announced that it had suffered a security breach in 2013 that affected more than 1 billion users, Bloomberg reported Thursday.

A person familiar with the situation told Bloomberg that a team led by Verizon General Counsel Craig Silliman is looking at the fallout from this breach — as well as a separate one revealed in September that compromised more than 500 million accounts — with an eye toward asking for a price cut or killing the deal altogether. According to the person, a major issue for Verizon is freeing itself of future legal liability stemming from the breaches.

Verizon was initially quiet after the first hack became public, but Silliman told reporters in October that it was “reasonable” to assume the breach had a “material” effect on the transaction.

In a Wednesday statement on the latest hack, Yahoo said compromised information could include names, email addresses, telephone numbers, dates of birth, hashed passwords and, in certain cases, encrypted or unencrypted security questions and answers. The company said its investigation shows that passwords in clear text, payment card data, and bank account information was not affected — which should provide a very small amount of relief to affected users.

Verizon agreed to acquire Yahoo’s core business for $4.8 billion in July — eight years after the Internet 1.0 icon rejected a $45 billion takeover offer from Microsoft.

Yahoo’s stock was down 4.72 percent as of 1:30 p.m. ET.