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While the latest SEC filing indicates that the deal is still moving forward, some industry commentators claim Verizon may yet use the data breaches to either scupper the deal or negotiate a discount.
Although Yahoo has consistently maintained that it is confident in the company’s value and is working towards integration with Verizon, a November 2016 SEC filing indicated that the company recognises that, in a worst-case scenario, the data breaches could affect the acquisition deal.
The deal will effectively split Yahoo’s search and web business from its investment arm, and according to the SEC filing the investment arm will become an investment company called Altaba.
Altaba will retain a Yahoo’s patent portfolio and investments, including a 36% stake in Yahoo Japan and a 16% stake in Alibaba.
Yahoo chief executive Marissa Mayer will not be a member of the board of the new entity, but will continue to be CEO until the deal with Verizon is completed, according to the Guardian.
Only five of 11 Yahoo board members – Tor Braham, Eric Brandt, Catherine Friedman, Thomas McInerney and Jeffrey Smith – will serve as directors of Altaba once the deal with Verizon has closed.
Brandt is to serve as chairman of the board and fellow Yahoo board member Maynard Webb is to become chairman emeritus to facilitate Altaba’s transition to an investment company, the SEC filing said.
Yahoo board members who, like Mayer and Webb, will not be joining the new board are Yahoo co-founder David Filo, Eddy Hartenstein, Richard Hill and Jane Shaw.
The SEC filing states that the decision to resign their board positions is not due to any disagreement with the company on any matter relating to the company’s operations, policies or practices.
While the investment part of Yahoo will be renamed Altaba, the Yahoo-branded web portal, search engine, email service and news services are expected to continue to exist, although they will be integrated with Verizon-owned AOL.
It remains unclear, however, what Mayer’s role will be after the Verizon deal is completed. She joined Yahoo from Google in 2012 and is the latest of seven chief executives or acting CEOs who failed to turn the company around in the face of competition from Google and Facebook.
In the face of mounting criticism from investors as the string of mobile-focused acquisitions she has overseen has failed to boost revenues, Mayer said she supported the sale of Yahoo’s operating business to unlock shareholder value.
Commenting on the Verizon deal in 2016, Mayer said it would provide opportunities for Yahoo to build further distribution and accelerate its work in mobile, video, native advertising and social.
She also told staff in an email that she was “planning to stay” and that it was important to her to “see Yahoo into its next chapter”. However, if she does walk away, she can expect a severance package worth $55m, according to the Independent.
The Verizon deal still needs be approved by regulators and is expected to be finalised in the first quarter of 2017. … … … … … … … … … … … … … … …