Towers Watson and Willis amend merger agreement

Towers Watson stockholders would receive a one-time cash dividend of $10.00 per share

Towers Watson and Willis have amended their merger agreement so Towers Watson shareholders would receive a one-time cash dividend of $10.00 per share pre-closing. That amounts to an increase of $5.13 per share or $357.4 million in aggregate.

Towers Watson would fund the increase.

Last week, the Institutional Shareholder Services recommended Willis shareholders vote for the deal but Towers Watson shareholders reject it, saying the latter company settled for too low a price.

Both companies’ boards of directors have approved the revised transaction.

“In order to enable Towers Watson shareholder support, we are therefore agreeing to allow Towers Watson to increase the pre-close cash dividend,” Willis CEO Dominic Casserley said in a statement. “This is not a decision that we take lightly. However, for an increment of $179 million (50.1% of $357.4 million), Willis shareholders have the opportunity to receive 50.1% of an estimated $4.7 billion of additional value that the deal is expected to generate.”

Yesterday, Towers Watson postponed its voting meeting. A new vote will occur by December 16.

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