This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Aon Takes Step Toward Closing Hewitt Deal

CHICAGO ( TheStreet) -- Aon Corp. (AON - Get Report) is offering $1.5 billion in unsecured debt to fund its acquisition of the human resources firm Hewitt Associates (HEW)

Aon will sell $600 million worth of five-year notes, $600 million worth of 10-year notes and $300 million worth of 30-year notes. Like other corporations, Aon was able to seize on the low-interest-rate environment to offer notes at 3.5%, 5% and 6.25%, respectively. The pricing came at a spread of 200-to-250 basis points above Treasury bills with comparable maturities.

Aon, an insurance and risk-management firm, announced a $4.9 billion cash-and-stock deal to acquire Hewitt on July 12. Pending approval by regulators and shareholders, the Chicago-based companies expect the deal to close by mid-November. They expect the deal to save $355 million a year by 2013 and generate $1.5 billion in stock value on a discounted cash-flow basis. They expect earnings per share to rise 1.2% next year and another 5.8% in 2013.

Since the close before the deal's announcement, Aon shares have been relatively flat, while Hewitt's stock has shot up 40% to just below Aon's $50-per-share offer. Late Thursday afternoon, Aon shares were up 7 cents at $37.85 and Hewitt was up 4 cents at $49.40.

--Written by Lauren Tara LaCapra in New York.



>To contact the writer of this article, click here: Lauren Tara LaCapra.

>To follow the writer on Twitter, go to http://twitter.com/laurenlacapra.

>To submit a news tip, send an email to: tips@thestreet.com.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AON $97.84 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs