Tin can deal

14 March 2017 By Jennifer Saba Follow @jennifersaba

CEO Lowell McAdam failed after two massive security breaches came to light to convince Yahoo to slash by a fifth the $4.8 bln price tag he’d offered for its core assets. Instead he accepted a far lower $350 mln concession. Other duds in need of a buyer now know where to look.

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Verizon Communications tried and failed to negotiate cutting by $950 million the $4.8 billion price it had offered to pay for Yahoo’s advertising and search-related businesses, according to Yahoo’s proxy filing that was released on March 13. Instead the two companies agreed to a $350 million cut; they also agreed to share certain legal and regulatory liabilities related to the security breaches.

Verizon sought to change the terms because of two security breaches at Yahoo that came to light after the companies had struck their deal in July.

The 2013 breach affected more than 1 billion user accounts; a year later a second breach hit more than 500 million user accounts.

The proxy also revealed that Yahoo Chief Executive Marissa Mayer will receive a $23 million golden-parachute compensation package which includes $3 million in cash and almost $20 million in equity.

Yahoo also said that after the sale to Verizon closes it will appoint Thomas McInerney as chief executive officer of Altaba, the newly formed company consisting of Yahoo’s Asian equity stakes in Alibaba and Yahoo Japan. McInerney has been on Yahoo’s board since 2012. He was also executive vice president and chief financial officer of IAC/InterActiveCorp from 2005 until 2012.

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