Yahoo confirms delay to takeover by Verizon

Out-Law News | 25 Jan 2017 | 10:41 am | 1 min. read

Yahoo has reported that the planned takeover of the company by US telecoms giant Verizon will be delayed.

The reported $4.8 billion deal was agreed by the companies last year, but in a regulatory filing to the US Securities and Exchange Commission (SEC), Yahoo said it did not expect to close the sale until the second quarter of this year. It had previously expected to complete the deal within the first three months of 2017.

Yahoo said the two companies are working together on "integration planning" and that it is "working expeditiously to close the transaction as soon as practicable in Q2".

Last year, Yahoo revealed that it had experienced two major data breach incidents; one in August 2013 and the other in late 2014.

The Financial Times reported last year that Verizon had asked Yahoo to disclose the full impact of the cyber attack on its business and that it was looking into reducing the price it had agreed to pay to acquire Yahoo as a result of the data breaches.

In its regulatory filing, Yahoo acknowledged the issue as a risk facing the business.

It said: "With respect to the proposed sale of Yahoo’s operating business to Verizon (the 'sale transaction'), risks and uncertainties include, among others … risks that Verizon may assert, or threaten to assert, rights or claims with respect to the stock purchase agreement as a result of facts relating to the security incidents disclosed on September 22, 2016 and December 14, 2016 and may seek to terminate the stock purchase agreement or renegotiate the terms of the sale transaction on that basis."

Yahoo chief executive Marissa Mayer said "enhancing security" for users was the company's "top priority".

"With security protocols and password changes in place, approximately 90% of our daily active users have already taken or do not need to take remedial action to protect their accounts, and we’re aggressively continuing to drive this number up," Mayer said.

The Financial Times has reported that the SEC has opened an investigation into Yahoo over the time it took to disclose the data breaches it experienced. The company's disclosures of the 2013 and 2014 breaches were made in September and December last year, respectively.

Yahoo's handling of the data breaches has also come in for scrutiny from EU data protection authorities