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Willis Group Holdings is considering increasing its offer for Towers Watson & Co after failing to muster enough shareholder support for its $18 billion merger with the human resources consultancy, a person with knowledge of the matter said.

Earlier today, Towers Watson said it planned to reconvene the shareholder meeting on Friday.* A special shareholder meeting was held Wednesday morning to tally votes for the deal.

The increased offer would come in the form of a larger special dividend for shareholders of Towers Watson, the person said, who spoke on condition of anonymity.

The range of increase for the special dividend could be around $5, according to people familiar with the matter who also spoke to Reuters on condition of anonymity.

Willis Group declined to comment. A Towers Watson representative did not immediately respond to a request for comment.

BlackRock Inc, the world’s largest asset manager and 5.9 percent shareholder of Towers Watson, refused to support the deal which proved to be a critical blow to Wednesday’s shareholder vote according to people with knowledge of the matter.

A BlackRock representative declined to comment.

One of the people with knowledge of the matter said terms of the special dividend could emerge before the end of the week, which could result in a further postponement of a final shareholder vote as shareholders would need time to consider the new offer.

Under terms of the deal struck in June, Willis investors would own 50.1 percent of the combined company while Towers Watson holders would get 2.649 Willis shares and a one-time cash dividend of $4.87 for each share they own. Towers Watson CEO John Haley was set to lead the combined company, with James McCann of Willis serving as chairman.

Shares of Towers Watson fell immediately after the deal was announced in June, and have been down as much as 13 percent in the months following the announcement. Starting last month, the structure of the agreement came under increased scrutiny, particularly from Towers shareholder Driehaus Capital Management.

A key goal of the merger is to have Willis, the world’s third-largest insurance broker, combine with Towers Watson to add consulting operations and help take on bigger rivals.

Proxy advisory firms recommended that shareholders vote against the proposed merger, with ISS citing the long-term benefits of the deal but pointing out that it valued Towers Watson at a 9 percent discount.

The failure to win the vote on Wednesday was another blow to activist investor ValueAct Capital, Willis’ second-largest shareholder, which has suffered several setbacks in the last two months. The most prominent was the scrutiny surrounding drug maker Valeant Pharmaceuticals, whose shares have plunged since accounting concerns involving the company arose last month.

The Towers Watson merger with Willis was a deal that ValueAct worked hard to construct, and one that ValueAct’s CEO Jeffrey Ubben lobbied intensely for shareholders to approve.

(Reporting by Michael Flaherty and Mike Stone in New York; editing by Chizu Nomiyama, Will Dunham and Andrew Hay)

[* Editor’s note: Willis has also postponed to Nov. 20 its shareholder meeting to vote on the merger.]

Related:

• Proxy Advisers Recommend Towers Watson Shareholders Vote for Willis Merger
• ISS Advice on Willis Towers Watson Deal Prompts Short-Term Shareholder Activism
• Towers Watson Investors ‘Should Reject’ Merger with Willis: Advisers
• Towers Watson Focused on Irish Tax Edge in $8.7 Billion Deal with Willis
• Towers Watson Shareholders Plan to Vote Against Merger with Willis: Sources
• WSJ: Towers Watson CEO Haley Sold Shares During Willis Merger Talks
• Willis CEO, Casserley, Opts Against Taking Severance Pay in Towers Watson Deal
• Willis Group, Towers Watson Agree to $18 Billion Merger