Towers Watson investor lobbys against deal with Willis Group
The $18bn merger plan of Towers Watson and Willis Group continues to cause controversy with investors, as we highlighted in July.&nbsp;Now Driehaus Capital Management, which owns a 1% stake in Towers Watson, is lobbying against the pending merger, as the company believes that Towers Watson is worth at least 39% more as a standalone company than by combining with Willis. Driehaus also says it undervalues Tower Watson's fast-growing OneExchange business. A spokesman for Towers Watson says it is committed to the merger, and confident it will go ahead.
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.