Towers Watson & Co
Robbins Arroyo LLP: Acquisition of Towers Watson & Co. (TW) by Willis Group Holdings PLC (WSH) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Towers Watson & Co. (NasdaqGS: TW) by Willis Group Holdings PLC (NYSE: WSH). On June 30, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Willis Group will acquire Towers Watson. Under the terms of the agreement, Towers Watson shareholders will receive 2.6490 shares of Willis for each share of Towers Watson they own, along with a $4.87 one-time cash dividend, the value of which is equivalent to $125.13 for each share of Towers Watson common stock.
Is the Proposed Acquisition Best for Towers Watson and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Towers Watson is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $125.13 merger consideration represents a discount of -8.90% based on Towers Watson’s closing price on June 1, 2015. This discount is significantly below the average one-month premium of nearly 50.5% for comparable transactions within the past two years. Further, the $125.13 merger consideration is significantly below the target price of nine analysts ranging from $157.00 set by an analyst at Piper Jaffray on March 4, 2015, and $129.00 set by an analyst at Goldman Sachs on May 19, 2015. Furthermore, Towers Watson traded above the target price at $141.88 on June 26, 2015.
On May 5, 2015, Towers Watson reported strong earnings results for its third quarter of fiscal year 2015. Total revenues were $921 million, an increase of 2% over the third quarter of 2014. Net income was $104 million, an increase of 2% over the third quarter of fiscal year 2014. Additionally, Towers Watson beat consensus analyst estimates for adjusted earnings per share, adjusted net income, and sales in every quarter for the past year. In commenting on these results, Towers Watson Chief Executive Officer John Haley remarked, “We are very pleased with our third quarter results…. The fiscal year-to-date results are a testament [to] the work ethic of our associates, and their commitment to creating value for our clients. These factors are critical as we continue to focus on building long-term sustainable earnings growth.”
In light of these facts, Robbins Arroyo LLP is examining Towers Watson’s board of directors’ decision to sell the company now, rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Towers Watson shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Towers Watson shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.