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Shareholders sue Willis over information on Aon deal

Willis Towers Watson

Two shareholder lawsuits have been filed in U.S. District Court in New York against Willis Towers Watson PLC and its directors and officers, stating “incomplete and misleading” financial information has been provided about Aon PLC’s proposed plan to buy the company.

The lawsuits call for delaying a shareholder vote on the deal until the situation is rectified.

Aon said in March it would buy Willis Towers Watson for nearly $30 billion in an all-stock deal that would create the world's largest insurance broker. The deal is expected to close in the first half of next year, pending shareholder approval.

Shiva Stein v. Willis Towers Watson Public Limited Company et al. was filed May 11. Richard Carter, individually and on behalf of all others similarly situated v. Willis Towers Watson Public Limited Co., et al., which seeks class-action status, was filed Tuesday.

The lawsuits are similar, with both charging Willis Towers Watson violated federal securities law by providing incomplete and misleading information in its preliminary proxy statement.

The Carter lawsuit, for example, states, “While touting the fairness of the Merger Consideration to the company’s shareholders in the Proxy, Defendants have failed to disclose certain material information that is necessary for shareholders to properly assess the fairness of the Proposed Transaction, thereby violating SEC rules and regulations and rendering certain statements in the Proxy materially incomplete and misleading.”

The complaint points to particular financial projections and the summary of certain valuation analyses conducted by Willis Towers Watson’s financial advisor, Goldman Sachs & Co. LLC, to support its opinion that the merger was fair to shareholders.

It states that the non-GAAP (generally accepted accounting principles) financial projections used “do not provide Willis Towers’ shareholders with a materially complete understanding of the assumptions and key factors considered in developing the financial projections, which assumptions, factors and other inputs the Board reviewed.”

On the valuation methodologies, it states, “The opacity concerning the company’s internal projection renders the valuation analyses … materially incomplete and misleading, particularly as companies formulate non-GAAP metrics differently.”

“It is imperative that the material information that has been omitted from the Proxy is disclosed prior to the forthcoming vote to allow the company’s shareholders to make an informed decision regarding the Proposed Transaction,” the complaint states.

The lawsuit seeks to stop a shareholder vote on the transaction until the information it seeks is disclosed.

Spokespeople for Willis Towers Watson and Aon had no comment on the lawsuits.

Regulatory filings show the transaction will have been more than two years in the making if it is completed as scheduled next year. Aon’s and Willis Towers Watson’s share prices have dropped amid market turmoil since the deal was announced, but on Aon’s first-quarter earnings call earlier this month, Aon CEO Greg Case said the proposed all-stock deal would not be affected by the changes.