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Hewitt Associates, Inc. investors file lawsuit against AON merger

  • If you currently hold shares of Hewitt Associates, Inc. (NYSE:HEW), you have certain options and you should contact the Shareholders Foundation, Inc.

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Lawsuit Overview

Company
Hewitt Associates, Inc.
Security
NYSE: HEW

Case Name
Hewitt Associates Deal Case 07/27/2010
Type of Lawsuit
Mergers and Acquisition
Court of Filing
Illinois State Court

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Summary

An investor in HEW stock filed a lawsuit in Illinois state court on behalf of current investors Hewitt Associates, Inc. (NYSE:HEW) alleging breaches of fiduciary duty by certain members of the Hewitt Associates board of directors for selling Hewitt Associates too cheaply to AON Corporation.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duty owed to investors of Hewitt Associates, Inc. (NYSE:HEW) by selling human resources outsourcing and consulting services company Hewitt Associates through an unfair price via an unfair process.

On Monday, July 12, 2010, Hewitt Associates, Inc. (NYSE: HEW),located in Lincolnshire, IL, and Aon Corporation (NYSE: AON) announced a definitive agreement under which Hewitt will merge with a subsidiary of AON. Under the terms of the agreement Hewitt stockholders will be entitled to receive for each share of Hewitt common stock (HEW), $25.61 in cash and 0.6362 of a share of Aon Corp. (AON) common stock. Based on the closing price of AON common stock on July 9, 2010, the aggregate consideration paid on a fully diluted basis is valued at $50 per Hewitt share. According to Hewitt Associates, Inc its board of directors approved the transaction and the offer represents a 41% premium to Hewitt's closing stock price on July 9, 2010, the last trading day prior to the announcement of the agreement.

Shares of Hewitt Associates, Inc. (HEW) traded before the news at $35.64 per share and climbed to $47.33 per share in response to the announcement.

But the plaintiff claims that the $50 offer by AON Corp undervalues Hewitt Associates. “Hewitt has weathered the recession well” so the plaintiff and “Hewitt’s business has been growing, and will continue to grow, even in these turbulent economic times. At least one analyst set a $55 per share price target for the company, so the investors. “Recent earnings and results indicate the company is moving in a positive direction and so does not need an infusion of cash that results in a recapitalization that strips the company's stockholders of control of the company absent an auction or other value maximization process , shareholders claim. Hewitt Associates, Inc. reported in 2007 Total Revenue of $2.99033billion, in 2008 $3.22765billion, and in 2009 $3.07356billion