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US: Towers should reject $8.7 billion Willis Deal, advisers say

By  |  November 8, 2015

Proxy advisory firm ISS recommended that shareholders vote against the proposed merger of Towers Watson and Willis Group Holdings, dealing a blow to the all-stock deal that has come under pressure from investors.

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    Insurance broker Willis Group, whose second largest shareholder is activist investor ValueAct, agreed in June to combine with financial management services provider Towers Watson, in a transaction that carried an implied equity value of about $18 billion.

    The merger valued Towers Watson at a 9 percent discount at the time of the announcement. Driehaus Capital, which owns 1.4 percent of the shares, publicly criticized the deal last month, saying Willis – the weaker of the two companies – should increase the cash dividend portion of the agreement.

    ISS said the potential long-term benefits of the combination are compelling, but shareholders should vote against it.

    “It is not at all that clear that realizing those opportunities necessitates taking a steep discount to the market value of their shares – or that Towers is, in fact, the party in “need” of this transaction,” ISS said.

    Full content: The Wall Street Journal

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