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Towers Watson shareholder advises against merger with Willis

Towers Watson shareholder advises against merger with Willis

Investment adviser Driehaus Capital Management L.L.C. has sent an open letter to shareholders of Towers Watson & Co. urging them to vote against a proposed merger with Willis Group Holdings P.L.C.

In its Monday letter, Chicago-based Driehaus said that it intends to vote the 697,000 Towers Watson shares owned by the Driehaus funds against the proposed $18 billion transaction because it believes maintaining Towers Watson as a stand-alone company benefits its shareholders.

Citing an analysis it released Monday, Driehaus said the stand-alone alternative offers Towers Watson shareholders between 39% and 53% more value than the proposed combination with Willis, and that Towers Watson shares have declined by 15% since the transaction was announced in June, “reflecting the value-destructive nature of the combination.”

In addition, Driehaus said that “the offer was made at a 9% discount, representing a 'takeunder'; Towers Watson is the only U.S. target this year not to receive a premium”, and that the “proposal ignores Towers Watson's superior growth prospects and market valuation and implies a significant enterprise value premium for Willis Group despite Willis Holdings Group's material operational challenges.”

Towers Watson and Willis declined to comment on the letter.

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