Business Context and Reporting Period
This Form 8-K was filed by Willis Group Holdings Public Limited Company (Willis) on April 15, 2013. The report details a corporate event regarding Willis's approximate 30 percent ownership interest in GS & Cie Groupe (Gras Savoye).
Key Financial Metrics
The filing does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses exclusively on the amendment of a shareholders' agreement.
Material Changes
On April 15, 2013, Willis amended the Shareholders' Agreement dated December 17, 2009, regarding its call option to purchase 100 percent of Gras Savoye. The material changes include:
- Extension of the call option exercise date by one year to 2016.
- Establishment of a new valuation formula for the 2016 transaction based on Gras Savoye's 2014 and 2015 consolidated accounts.
- The valuation formula utilizes a weighting of revenue and EBITDA averaged over a one-to-two-year period, to which pre-determined market multiples will be applied.
Outlook, Risks, and Contingencies
Management has outlined specific contingencies and deadlines associated with the amended agreement:
- Notification Deadline: Willis must notify other shareholders by April 30, 2015, whether it waives or retains the call option.
- Exercise Deadline: If retained, the option must be exercised by May 15, 2016.
- Put Option Risk: If Willis retains the option but fails to exercise it by May 15, 2016, other shareholders can require Willis to acquire their shares by June 15, 2016.
- Third-Party Sale Risk: Main shareholders may initiate procedures to sell Gras Savoye to a third party if Willis waives the option, or if Willis retains the option but does not exercise it and other shareholders do not force a sale to Willis.
Investor Verification Checklist
- Verify the specific terms of the valuation formula (revenue/EBITDA weighting and market multiples) to be applied in 2016.
- Monitor the April 30, 2015 deadline for Willis's decision to waive or retain the call option.
- Assess the financial impact of a potential forced acquisition of Gras Savoye shares by June 2016 if the option is not exercised.
- Review the attached press release (Exhibit 99.1) for additional management commentary on the strategic rationale.