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Shareholder files suit over Willis Group-Towers Watson deal

Willis Towers Watson Plc is facing a purported securities class-action lawsuit alleging that the company made false statements in its filings related to the merger of Willis Group Holdings Plc and Towers Watson & Co.

The defendants, which also include Towers Watson, Willis Group Holdings, Towers Watson shareholder ValueAct Capital Management LP, and executives John Haley, Dominic Casserley and Jeffrey Ubben, allegedly violated provisions of the Securities Exchange Act by issuing false and misleading statements in proxy materials filed with the SEC.

The merger initially required the approval of a majority of Towers Watson shareholders, but the company's board authorized then-Chairman and CEO Haley to renegotiate the deal terms as the deal faced "waning" shareholder support. Instead of negotiating in the best interests of shareholders, Haley allegedly conspired with Willis Group Holdings executives and ValueAct Capital Management and then persuaded Towers Watson's board and shareholders that a $5 increase in the special dividend was the most he could extract from Willis Group Holdings.

The lawsuit further alleges that the defendants made numerous misrepresentations to Towers Watson shareholders to mislead them into accepting consideration from the merger that was "well below" fair value for their shares.

The lawsuit was filed in the U.S. District Court for the Eastern District of Virginia on behalf of Cambridge Retirement System and all Towers Watson shareholders of record as of Oct. 2, 2015.

Willis Towers Watson did not immediately respond to S&P Global Market Intelligence's request for comment.