Driehaus Capital Management Issues Open Letter to Towers Watson Shareholders Opposing its Proposed Transaction with Willis Holdings

CHICAGO, Sept. 15, 2015 /PRNewswire/ -- Driehaus Capital Management, a Chicago-based investment adviser of funds that own 697,000 shares of Towers Watson & Company, released an open letter to its fellow Towers Watson shareholders regarding Towers Watson's proposed transaction with Willis Holdings Group plc. Driehaus states that it intends to vote the shares owned by the Driehaus funds against the proposed transaction. The letter and an accompanying paper explain why the proposed transaction does not adequately compensate Towers Watson shareholders.

The full text of the letter is provided below:

September 14, 2015

Fellow Towers Watson & Company Shareholders,

Driehaus Capital Management LLC is the investment adviser for funds that own 697,000 shares of Towers Watson. We have issued a white paper that provides detailed analysis of the proposed transaction and outlines for all Towers Watson & Company shareholders a decisive case for why it's in the interests of Towers Watson shareholders to vote against the proposed Willis Holdings Group plc transaction.

The following is a summary of some of the white paper's key points. To read the white paper in its entirety, please click here. (Link: http://driehauscapitalmanagement.com/pdf/strategies/Driehaus-TW-White-Paper-0915.pdf)

THE STANDALONE ALTERNATIVE OFFERS SUPERIOR VALUE TO TOWERS WATSON SHAREHOLDERS

• The standalone alternative offers Towers Watson shareholders between 39%-53% more value than the proposed combination with Willis Group
• Towers Watson shares have declined by 15% since the transaction was announced, reflecting the value-destructive nature of the combination

THE PROPOSED EQUITY SPLIT TRANSFERS VALUE FROM TOWERS WATSON SHAREHOLDERS TO WILLIS STAKEHOLDERS

• The offer was made at a 9% discount, representing a 'takeunder;' Towers Watson is the only US target this year not to receive a premium
• 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

SYNERGY VALUATIONS ARE MATERIALLY INFLATED AND FAIL TO COMPENSATE FOR VALUE DESTRUCTION

• Management's estimates of net present value synergies are grossly inflated because they use P/E for capitalization; when capitalized at a realistic multiple, synergies are blatantly insufficient to bridge the value-destruction gap

THE PROPOSAL EXPOSES SHAREHOLDERS TO A RISKY AND DEBT-LADEN WILLIS RESTRUCTURING

• After three years of operating margin contraction, Willis announced a four-year $410 million restructuring plan in April 2014. The plan is unproven and exposes Towers Watson shareholders to material risk
• Willis Group's debt/EBITDA is more than 3x; prior to the announcement, the company faced a prospective downgrade to non-investment grade amid continued credit-metric deterioration

The transaction proposed by Willis Holdings Group will destroy value for Towers Watson & Company's shareholders. Once again, we urge fellow shareholders to vote against this proposal.

Sincerely,

About Driehaus Capital Management
Driehaus Capital Management LLC is a privately-held, independent investment adviser with $10 billion in assets under management as of August 31, 2015. The firm manages global, emerging markets, and US growth equity, hedged equity, and alternative investment strategies. Founded in 1982 by Richard H. Driehaus, the firm serves a diverse institutional client base comprised of corporate and public pensions, endowments, foundations, sub-advisory, financial advisors and family offices, globally.

For more information, please visit www.driehaus.com.

This material is for general informational purposes only and is not intended to be relied upon as investment advice. The opinions expressed are those of Driehaus Capital Management LLC ("Driehaus") as of September 14, 2015 and are subject to change at any time due to changes in market or economic conditions.

The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Driehaus to be reliable and are not necessarily all inclusive. Driehaus does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

Driehaus is the investment adviser for funds that own 697,000 shares of Towers Watson & Co. and have sold short shares of Willis Group Holdings plc as of September 14, 2015. Holdings are subject to change, and Driehaus may buy shares of Towers Watson or Willis Holdings Group or sell, including sell short shares of Towers Watson or Willis Holdings Group at any time. The discussion of securities should not be viewed as a recommendation to buy, sell or hold any particular security.

Driehaus is not soliciting proxies relating to the Towers Watson shareholder meeting and does not have the authority to vote your proxy. Driehaus urges Towers Watson shareholders to vote against the proposed transaction.

Media Contact:
Bradley Dawson
Vice President, Marketing and Product Development
312.587.3844
[email protected]

SOURCE Driehaus Capital Management

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