Securities Suit Filed After Consummation of Willis Towers Watson Merger

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A proposed class action alleging violations of securities law has been filed against Willis Towers Watson plc, its current CEO, Towers Watson & Co., Willis Group Holding plc, its former CEO, ValuAct Capital Management, and its current CEO. The case takes issue with a merger between Willis and Towers that closed on January 4, 2016, producing the combined company Willis Towers Watson. The plaintiff in the suit claims the defendants filed a misleading proxy statement in connection with the merger, deceiving Towers stockholders into approving the transaction and robbing them of the full value of their shares in the company.

The complaint claims stockholders did not support the original proposal, prompting Towers’ CEO to renegotiate the terms. According to the updated proxy statement, he was only able to increase the cash dividend by “a modest $5 per share” after meeting with Willis executives. The suit alleges that the proxy statement failed to disclose that the man also met with the CEO of ValuAct, Willis’ largest shareholder, and negotiated a three-year, $165 million compensation package for himself as the CEO of the future combined company in exchange for “seeking the minimum consideration necessary” to gain shareholder approval. The proxy statement allegedly omitted this conflict of interest and misled shareholders into believing the defendants had sought to maximize shareholder value.