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.
The $ 18bn merger plan of Towers Watson and Willis Corporation continues to cause controversy with investors , as we highlighted in July . 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 .