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EX-99.2 - EX-99.2 - WILLIS TOWERS WATSON PLC | y80525exv99w2.htm |
EX-99.1 - EX-99.1 - WILLIS TOWERS WATSON PLC | y80525exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): November 18, 2009
Willis Group Holdings Limited
(Exact name of registrant as specified in its charter)
000-16503 | Bermuda | 98-0352587 | ||
(Commission File Number) | (State or other jurisdiction of | (I.R.S. Employer | ||
incorporation or organization) | Identification No.) |
c/o Willis Group Limited
51 Lime Street
London EC3M 7DQ, England
(Address of Principal Executive Offices)
51 Lime Street
London EC3M 7DQ, England
(Address of Principal Executive Offices)
(44) (20) 3124-6000
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry Into a Material Definitive Agreement
Gras Savoye
On November 18, 2009, Willis Europe BV (Willis Europe), a wholly-owned subsidiary of
Willis Group Holdings Limited (the Company), Astorg Partners, a private equity fund
(Astorg), Soleil, a newly formed French société par actions simplifiée
(TopCo), Alcee, a newly formed French société par actions simplifiée and wholly owned
subsidiary of TopCo (BidCo), the Lucas family shareholders, the Gras family shareholders
(collectively, the Family Shareholders), key managers (the Managers) of Gras
Savoye & Cie (Gras Savoye) and other minority shareholders of Gras Savoye (the
Minority Shareholders and, together with Willis Europe, Astorg, the Family Shareholders
and the Managers, the Investors) entered into a definitive Investment and Share Purchase
Agreement (the Investment Agreement) pursuant to which the Investors will reorganize the
share capital of Gras Savoye through a leveraged transaction.
Upon the terms and subject to the conditions set forth in the Investment Agreement (i) BidCo would
acquire 99.9% of the outstanding shares (the Acquisition) of Gras Savoye, (ii) Astorg
would obtain a 31.8% indirect interest in Gras Savoye, (iii) Willis and the Family Shareholders
would each retain a 31.8% indirect interest in Gras Savoye and (iv) the Managers and the Minority
Shareholders would retain an indirect interest in Gras Savoye. Astorg, Willis and the Family
Shareholders would each hold 33.3% of Topcos voting rights. The Managers and Minority
Shareholders would generally have no voting rights except as required by French law.
Pursuant to the terms of the Investment Agreement, the Acquisition would be accomplished in three
steps. The first step includes contributions to, subscriptions for shares of, and loans to TopCo.
Willis Europe would contribute to Topco a portion of its shares in Gras Savoye, valued at
approximately 90.6 million, in exchange for (i) TopCos preferred voting shares in an amount
equal to approximately 36.2 million and (ii) bonds issued by TopCo, convertible into preferred
voting shares of TopCo, in an amount equal to approximately 54.4 million. Astorg would
subscribe in cash for (i) TopCos preferred voting shares in an amount equal to approximately
36.2 million and (ii) bonds issued by Topco, convertible into preferred voting shares of
TopCo, in an amount equal to approximately 54.4 million. The Lucas family shareholders would
contribute a portion of their shares of Gras Savoye, valued at approximately 60.6 million, to
TopCo in exchange for (i) TopCos preferred voting shares in an amount equal to approximately
24.2 million and (ii) bonds issued by Topco, convertible into preferred voting shares of
TopCo, in an amount equal to approximately 36.4 million. The Gras family shareholders would
subscribe in cash for (i) preferred voting shares of TopCo for an amount equal to approximately
12 million and (ii) bonds issued by Topco, convertible into preferred voting shares of TopCo,
in an amount equal to approximately 18 million.
The Managers, through special purpose vehicles (the ManCos) would subscribe for
approximately 10 million non-voting preferred shares with warrants attached, in exchange for
8.5 million in cash and a contribution of Gras Savoye shares worth approximately 1.5
million. The Minority Shareholders, through special purpose vehicles (the MinCos),
would subscribe for approximately 1.1 million non-voting preferred shares of TopCo and
approximately 1.7 million worth of bonds issued by TopCo, convertible into non-voting
preferred shares, in each case in exchange for cash.
Pursuant to the terms of the Investment Agreement, the convertible bonds issued by TopCo will bear
interest at a rate of 10% per annum and are convertible into the same class of preferred shares
held by the applicable shareholder. They will convert automatically into preferred shares in the
event of a refinancing and in the event of a Distribution (except in the case of a distribution of
dividends). A Distribution includes distributions of amounts on the preferred shares in
the event of dividend payments, certain permitted transfers or an initial public offering, merger
or judicial or voluntary liquidation of TopCo. In the event of a Distribution, the non-voting
preferred shares held by the ManCos will receive priority in payment based upon the percentage of
their shareholdings over the preferred shares issued to the convertible bondholders. Depending
upon the amounts available under the Distribution, the remaining amounts will be paid to Astorg,
Willis Europe, the Family Shareholders and the Mincos.
In addition, Willis Europe would provide a 32.5 million loan to TopCo and the Family
Shareholders would provide a 32.5 million loan to TopCo in exchange for bonds, accruing
interest at a rate of 6% per annum, which could, subject to the terms of the Third Party Financing
under certain circumstances, become convertible into TopCos preferred voting shares.
The second step of the Acquisition includes a transfer by TopCo to BidCo of all of the Gras Savoye
shares that TopCo received in connection with step one in exchange for shares of BidCo. In
addition, TopCo would contribute to BidCo all of the cash received by TopCo in connection with
step one, in an amount of approximately 97.5 million.
In the third step, BidCo would use a portion of the cash it received from TopCo and a portion of
the proceeds to be received from a financing arrangement with unrelated parties (the Third
Party Financing) to purchase the remaining shares of Gras Savoye held by Willis Europe for
cash (in an amount equal to approximately 107.3 million of which 1.5 million will be a
bridge loan to the ManCos) and the other shares held by the Family Shareholders.
The Company expects that the Third Party Financing would be a loan of approximately 145
million to BidCo, and the Company expects that the Third Party Financing would be senior debt
secured by (i) pledges by each of Astorg, Willis Europe, the Family Shareholders, the ManCos and
the MinCos of their shares and convertible bonds issued by TopCo, (ii) a pledge by TopCo of the
issued shares of BidCo and (iii) a pledge by BidCo of the issued shares of Gras Savoye. In
addition, the Company expects that the Third Party Financing would be non-recourse to the Company
or Willis Europe and that Willis Europes liability for the repayment of any funds owed would be
limited to the Willis Europes pledge of TopCos shares.
On closing of the transactions described above, the parties to the Investment Agreement will
execute a Shareholders Agreement, the form of which has been agreed (the Shareholders
Agreement). Pursuant to the terms of the Shareholders Agreement, Topco will be governed by a
supervisory board, executive committee and president, Patrick Lucas. If Patrick Lucas were
dismissed without cause, he would have the option to cause Willis Europe and Astorg to purchase all
of his shares in TopCo. The supervisory board will be comprised of 9 members, with Astorg, Willis
Europe and the Family Shareholders each having the right to appoint and remove 3 directors. This
decreases to (i) 2 directors if a shareholder owns less than 26% of the outstanding interests of
Topco and (ii) 1 director if a shareholder owns less than 18% of the outstanding interest of Topco.
Shareholders lose the right to remove and appoint directors if they own less than 8% of the
outstanding interest of Topco. Generally, all matters require approval by a majority of the
members of the supervisory board, except for key matters involving the Company, such as material
investments and release of the lock-up period, which depending on the matter could require the
prior authorization of a 7/9ths majority of the supervisory board or unanimous consent and can be
subject to veto rights granted to the Astorg appointed directors.
The Shareholders Agreement prohibits, except with unanimous consent of the supervisory board and
other customary exceptions, the parties from transferring any Topco securities until 2015. At the
expiration of this period, shareholders are entitled to pre-emptive and tag-along rights.
The Shareholders Agreement grants Willis Europe a call option, exercisable in 2015, to acquire all
of the shares of TopCo owned by the other TopCo shareholders based on an agreed formula for
determining the enterprise and equity value of TopCo in 2015 based on Topcos 2013 and 2014
consolidated accounts. The formula is based on a weighting of revenue and EBITDA averaged over two
years to which certain prevailing market multiples would be applied. Willis Europe will be
required to notify the other shareholders prior to April 30, 2014 as to whether or not it waives
the call option. If Willis Europe does not waive the call option by April 30, 2014, then it must
exercise the call option in 2015 or the other shareholders may initiate procedures to sell TopCo to
a third party.
The Company will guarantee Willis Europes obligations under the Shareholders Agreement, and,
together with its affiliates, will be subject to non-compete and non-solicit clauses with Gras
Savoye, which, depending on the circumstances, will survive for a period of two years after the
Company ceases to own, directly or indirectly, any of TopCos equity securities or TopCos
securities which are convertible into equity.
The Company expects that closing of the transactions contemplated by the Investment Agreement will
occur in the fourth quarter of 2009. However, the closing remains subject to finalizing the
agreements for the Third Party Financing and other conditions customary to closing and,
accordingly, the closing date remains subject to change.
Amendments to Outstanding Indebtedness of the Willis Group
On November 18, 2009, in connection with the transactions contemplated by the Investment
Agreement, the Company entered into (i) a First Supplemental Indenture (the First
Supplemental Indenture) to the Indenture, dated as of March 6, 2009, by and among Trinity
Acquisition plc, as issuer, The Bank of New York Mellon, as Trustee, the Company, as guarantor,
and the other guarantors party thereto (the Indenture), and (ii) a Fourth Amendment (the
Fourth Amendment) to the Credit Agreement, dated as of October 1, 2008 (as amended, the
Credit Agreement), among Willis North America Inc. (WNA), as the borrower, the
Company and the other guarantors identified on the signature pages thereto, as guarantors, the
lenders party thereto, Bank of America, N.A., as Administrative Agent and Swing Line Lender, and
Bank of America Securities LLC, as Sole Lead Arranger.
The First Supplemental Indenture, which has been consented to by the requisite number of holders
of the notes issued pursuant to the Indenture and will become effective on November 18, 2009,
permits the transactions relating to the disposition by the Company and its subsidiaries of its
interests in Gras Savoye and the investments, payments and incurrence of indebtedness made
thereafter, as contemplated by the Investment Agreement and the Shareholders Agreement.
The Fourth Amendment, which became effective November 18, 2009, among other things, (a) permits
the Company and its subsidiaries to, in each case in connection with the Acquisition, (i) dispose
of all of the equity interests of Gras Savoye, so long as 100% of the net cash proceeds from such
disposition are applied to prepay loans extended to WNA under the Credit Agreement, (ii) invest in
TopCo, and (iii) grant liens on such investment in TopCo, and (b) provides that indebtedness
arising solely from such permitted liens would not be counted for purposes of calculating
consolidated funded indebtedness.
Item 7.01. Regulation FD Disclosure
On November 18, 2009, the Company issued a press release announcing the execution of the Investment
Agreement and discussing the transactions contemplated thereby. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated by reference herein.
On Thursday, November 19, 2009, at 8:00 a.m. Eastern Time, Joseph Plumeri, Chairman and Chief
Executive Officer of the Company, will hold a live webcast and conference call to discuss the
Investment Agreement and transactions contemplated thereby. In connection with such webcast and
conference call, the Company has prepared a presentation regarding the Investment Agreement and
the transactions contemplated thereby which is attached hereto as Exhibit 99.2 and is incorporated
by reference herein.
The press release, webcast and presentation materials will be available at the Investor
Relations section of the Companys website at www.willis.com. To dial in to the live
teleconference, please call (866) 803-2143 (domestic) or +1 (210) 795-1098 (international), with a
pass code of Willis. Media and individuals will be in a listen-only mode. Participants are
asked to call in a few minutes prior to the call in order to register for the event. A replay of
the call will be available through December 19, 2009 at 10:59 p.m. Eastern Time, by calling (800)
754-7904 (domestic) or + 1 (203) 369-3332 (international) with no pass code, or by accessing the
website.
Item 9.01. Financial Statements and Exhibits
(d)
|
Exhibits |
Exhibit No. | Description | |
99.1
|
Company Press Release, dated November 18, 2009 | |
99.2
|
Gras Savoye Transaction Presentation |
Forward-Looking Statements
The Company has included in this document ''forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934,
which are intended to be covered by the safe harbors created by those laws. These forward-looking
statements include information about possible or assumed future results of operations. All
statements, other than statements of historical facts, included in this document that address
activities, events or developments that the Company expects or anticipates may occur in the future,
including such things as business strategies, competitive strengths, goals, the benefits of new
initiatives, growth of our business and operations, plans and references to future successes are
forward-looking statements. Political, economic, climatic, currency, tax, regulatory, competitive,
and other factors could cause actual results to differ materially from those anticipated in the
forward-looking statements. Also, when the Company uses the words such as ''anticipate,
''believe, ''estimate, ''expect, ''intend, ''plan, ''probably, or similar expressions,
it is making forward-looking statements.
The foregoing list of factors is not exhaustive and new factors may emerge from time to time that
could also affect actual performance and results. For additional factors see also Part I, Item 1A
''Risk Factors included in the Companys Form 10-K for the year ended December 31, 2008 and its
Quarterly Report on Form 10-Q for the quarter ended September 30, 2009. Copies of the 10-K and
10-Q are available online at www.sec.gov or on request from the Company.
Although the Company believes that the assumptions underlying our forward-looking statements are
reasonable, any of these assumptions, and therefore also the forward-looking statements based on
these assumptions, could themselves prove to be inaccurate. In light of the significant
uncertainties inherent in the forward-looking statements included in this document, the inclusion
of this information is not a representation or guarantee by the Company that its objectives and
plans will be achieved.
This Current Report speaks only as of its date, and we disclaim any duty to update the information
contained herein.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
WILLIS GROUP HOLDINGS LIMITED |
||||
Date: November 18, 2009 | By: | /s/ Adam G. Ciongoli | ||
Name: | Adam G. Ciongoli | |||
Title: | Group General Counsel |
Exhibit Index
Exhibit No. | Description | |
99.1
|
Company Press Release, dated November 18, 2009 | |
99.2
|
Gras Savoye Transaction Presentation |