Yahoo to spend $100 million on $4.48 billion Verizon sale

Yahoo’s tumultuous sale to Verizon wasn’t just disrupted by scandal — it’s been stunningly expensive.

The disaster-prone Sunnyvale tech giant had put itself up for sale in February 2016, and about five months later accepted a $4.83 billion bid from Verizon.

Then stuff began hitting the fan. Stuff that complicated the sale and undoubtedly boosted the cost for Yahoo of closing the deal far higher than if the gods of scandal had remained inert.

Two months after announcement of the Verizon deal, Yahoo revealed that it had set a new world record for number of user accounts breached by hackers in a single attack: at least 500 million, from a 2014 incident.

Soon after that, Yahoo in a regulatory filing disclosed that it had known about that hack in 2014 but kept quiet about it for almost two years.

Then in December came news that in 2013, the firm had suffered an even bigger breach, of at least a billion user accounts, chalking up another new world record.

Those revelations threw the Verizon sale into jeopardy. But ultimately Verizon used them to leverage a $350 million discount, and the $4.48 billion deal is, according to Yahoo CEO Marissa Mayer, going to close in June.

Now it turns out that for Yahoo, this is one costly sale.

“Yahoo has incurred, and expects to incur, significant non-recurring costs associated with the Sale Transaction,” the company said in a proxy statement to shareholders in advance of a June 8 special meeting of shareholders.

“These costs and expenses include financial advisory, legal, accounting, consulting, and other advisory fees and expenses, reorganization and restructuring costs, severance and employee benefits-related expenses, public company filing fees and other regulatory expenses, printing expenses, and other related charges.”

Up until April 24, those costs amounted to $51.5 million, according to the statement.

Yahoo said it expected further transaction costs to amount to $46.8 million, for a grand total of $98.3 million.

Most of these further costs are contingent on closing of the deal, Yahoo noted.

At the special meeting June 8, shareholders will be asked to vote on whether to approve the Verizon deal; whether to approve close-of-sale “golden parachute” compensation for Yahoo executives; and whether to adjourn or postpone the meeting if there aren’t enough votes in favor of the sale, in order to hunt down more shareholders who would say yes.

The golden parachutes subject to stockholder approval cover four Yahoo executives: Mayer, slated to receive $23 million; Chief Financial  Ofiver Ken Goldman, to receive $9 million; David Filo, co-founder and “Chief Yahoo,” to receive $67,000; and Chief Revenue Officer Lisa Utzschneider, to receive $15.7 million.

 

Photo: Yahoo CEO Marissa Mayer in 2015 (Eric Risberg/AP)

 

Tags: , , , , , , ,

 

Share this Post



 
 
 
  • drbluejay

    I will vote …………..No, because it does not benefit the shareholder at all. MM can pay the 98 Million out of her …………exit package. Fire MM for cause and sue her for fiduciary lapses for failing to disclose the hack costing YHOO 350M.

    • Devo

      I agree 100%….its funny how someone could steal a pack of gum and get in more trouble then this lady who literally cost Yahoo at least 1 billion dollars by her sheer incompetency. I sure hope the shareholders vote down any incentive package for any of these clowns. They’ve already stole what I’m sure amounts to millions in salaries, incentives, and stock options as it is.

 
 
css.php