Verizon Communications Inc.’s takeover of Yahoo Inc. may be in jeopardy, with a lawyer for the company confirming Thursday that the Yahoo hack may have put the $4.83 billion deal at risk.

Verizon’s General Counsel Craig Silliman is said to have told reporters at a Verizon event in Washington, DC on Thursday that the data breach could trigger a clause allowing it to withdraw from the deal, according to Reuters.

“I think we have a reasonable basis to believe right now that the impact is material and we’re looking to Yahoo to demonstrate to us the full impact,” Silliman said. “If they believe that it’s not then they’ll need to show us that.”

Silliman declined to comment as to whether Verizon is talking to Yahoo about discounting the acquisition price, a rumor that first emerged in the first week of October.

At that time it was claimed that Verizon was asking for $1 billion discount off the acquisition price and that Verizon AOL chief Tim Armstrong, who would run Yahoo post acquisition, is “getting cold feet” with a source adding that he was “pretty upset about the lack of disclosure and he’s saying can we get out of this or can we reduce the price?”

As for Yahoo, the company said in a statement, “We are confident in Yahoo’s value and we continue to work towards integration with Verizon.”

Yahoo first officially declared that over 500 million accounts were hacked late September, but subsequent reports suggested that the hack may have been as big as 3 billion user accounts. The data gathered in the hack, blamed by Yahoo on a state-sponsored actor, included names, email addresses, telephone numbers, dates of birth, hashed but crackable passwords and unencrypted security questions and answers.

Silliman added to reporters that at this stage Verizon has had preliminary briefings from Yahoo but it still needs “significant information” from the company before it makes a final decision on the materiality of the hack, before noting that Verizon is “absolutely evaluating (the breach) and will make determinations about whether and how to move forward with the deal based on our evaluation of the materiality.”

The best that can be taken from the news is that Verizon and Yahoo are still talking about the breach. But those talks don’t appear to be going well. If the lead counsel for Verizon is publicly discussing the fact that Verizon is able to walk away from the deal, and that there’s an out clause in the acquisition contract allowing them to do so, they must at the very least be considering using it.

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