Verizon not giving up on Yahoo bid
New Orleans (CNN) –
The long drama between Yahoo and Verizon may finally be coming to an end.
Yahoo’s stock popped more than 2% in early trading Wednesday following reports Verizon may only ask for a slight price cut in its deal to buy the Internet company.
Verizon is said to be close to finalizing an amended deal with Yahoo that could shave $250 million to $300 million off the original $4.83 billion price tag, according to reports from Bloomberg and The Wall Street Journal.
Reps for Yahoo and Verizon declined to comment on the reports.
The agreement would be welcome relief to Yahoo investors. There have been doubts about the deal for months as a result of Yahoo revealing not one, but two massive security breaches affecting more than one billion users.
Brian Wieser, an analyst who covers Yahoo for Pivotal Research Group, had assumed Verizon would seek a $1 billion price cut as a result of the breaches — if the deal went through at all.
“The worst case scenario is they outright canceled it,” Wieser told CNNTech. “It’s better for Verizon and Yahoo to put the standalone [Yahoo] business out of its misery and roll it into Verizon as soon as possible.”
Yahoo warned investors in November there was “no assurance” Verizon would actually go through with the deal. Last month, Yahoo told investors it expected the closing date to be delayed.
Verizon agreed to buy Yahoo’s core Internet business in July. Verizon’s goal was to use Yahoo’s billion users to build an online advertising powerhouse to rival Google and Facebook.
Then the security breaches were disclosed, prompting concerns about lawsuits and lost users. Just this week, the U.S. Senate began probing Yahoo on the hack.
“I’ve got an obligation to make sure we protect our shareholders and our investors,” Marni Walden, Verizon’s head of product, said at an event in October. “We need to have more information before we can determine [what happens to the deal].”
Some of Verizon’s competitors have taken jabs at it over the Yahoo drama.
“Verizon, everybody knows, Yahoo is driving them nuts,” T-Mobile CEO John Legere said on an earnings call this week. “They’re damned if they do it, they’re damned if they don’t.”
Apparently Verizon has decided to be damned for doing it.