June 1, 2018

Calif. water utility pledges faith in $750M merger

PHOTO | Connecticut Water via Twitter
PHOTO | Connecticut Water via Twitter
A Connecticut Water truck outside Middlesex Hospital in Middletown.

California's SJW Group has affirmed its commitment to a $750 million merger with Connecticut Water Service Inc., despite the Clinton-based water utility recently announcing it would solicit competing bids for 45 days.

Connecticut Water said Thursday it amended the merger agreement, now worth $64.72 per share based on SJW Group's closing share price as of April 25 in order to review and negotiate competing proposals. The company says the process will instill "full confidence" in its shareholders.

In response, SJW Group's board of directors issued a statement restating its commitment to the deal, arguing it will create "significant" short- and long-term value for its shareholders.

SJW Group says it waived its right to solicit other bid packages, demonstrating its "confidence in the superior value and strategic merits" of its deal with Connecticut Water.

Still, the California water utility will likely have at least one competitor in the bicoastal water war.

Connecticut Water said Eversource Energy is "among those invited to participate" in the bidding, although it still believes the utility's April 5 unsolicited bid of $63.50 per share is an inferior package.

Meantime, Eversource spokeswoman Caroline Pretyman did not comment on whether the utility would propose a new bid package but said they are currently reviewing the information.

Last year, Eversource acquired Bridgeport-based Aquarion Water Co. for $1.68 billion.

Meantime, California Water Service Group, which submitted an April 4 unsolicited offer to acquire SJW Group for $68.25 per share, said Connecticut Water's "one-sided" amendment reflects a "lack of stakeholder support" and urged SJW shareholders to vote against the merger.

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