Towers Watson & Co. postponed its special meeting scheduled for Wednesday to enable more time to marshal votes in support of the company's proposed merger with Willis Group Holdings.
“They didn't get enough votes to pursue the merger, so they adjourned the meeting” until Friday, said Matthew Schoenfeld, assistant portfolio manager, Driehaus Capital Management.
The California State Teachers' Retirement System, West Sacramento, will vote against the merger and golden parachute severance payments for top Towers Watson executives, according to the $188 billion pension fund's proxy-voting disclosure. It joins the $175.6 billion Florida State Board of Administration, Tallahassee, which also opposes the merger proposal.
The C$272.9 billion ($204.8 billion) Canada Pension Plan Investment Board, Toronto, plans to vote in favor of the proposed merger.
ValueAct Capital Management, which owns 475,000 Towers Watson shares and 18.4 million, or 10.2%, of Willis' shares, entered into a voting agreement with Towers Watson to vote in favor of the merger.
Driehaus has been outspoken in its opposition to the proposal's terms, calling the proposed merger a “value-destroying acquisition” of Towers Watson. Driehaus already announced its plans to vote its 1,175,113 Towers Watson shares, amounting to 1.5% of the company, against the merger and asked other shareholders to oppose the deal, according to the investment management firm's filings with the Securities and Exchange Commission.
Driehaus is short Willis stock, declining to disclose the number of shares.
Towers Watson announced the postponement in a news release Wednesday, saying the company seeks “to provide additional time for stockholders to vote.”
The merger was valued at $8.7 billion, or $125.13 per Tower Watson share, the day before the proposal announcement on June 30.
Under the proposed merger agreement, for each share they own, Towers Watson shareholders would receive 2.649 Willis shares and a $4.87 special dividend.
In midday trading Wednesday, Towers Watson stock was trading at $124.91 a share, while Willis stock was trading at $43.99 a share. The midday price implies a $116.52 value to Towers Watson shareholders for the equity part of the Willis merger deal, amounting to a 6.7% discount from the Towers Watson share price, or including the special dividend for a value of $121.39, a 2.8% discount.
