Just to make a note, I am short WTW, but longs I would be very very worried about this. WTW just announced a $720M buyback of shares at $73+ per share (which is dumb, first you buy low sell high), but even there share buybacks are horrible and do nothing for a stock price. Better off to just completely pay off debt then sky the divvy...okay enough of that rant. But WTW now has $215M in cash on the books according to the release. That means WTW has to add $505M in debt to do this share buy back. Therefore WTW is going to go from 85% debt to equity to 128% debt to equity. This is how you put companies bankrupt. If I were long, I would get the f out here. Horrible management by this company.
You actually did the calculation wrong. They are buying back from the public and then making a matching purchase from their largest investor. So the investor gets a great price and liquidity and the public company will be saddled with and additional $1.5B of debt not $720mm.
I wonder what the rate of interest will be? Given that they are buying 25% of the shares but only increasing EPS buy 12% I would assume quite high.