June 6, 2018

Eversource rejects CT Water's bidding-war invitation

File Photo
File Photo
Connecticut Water Co.'s Chester Reservoir.

Eversource Energy on Tuesday balked at an attempt by Clinton-based Connecticut Water Service Inc. to lure new merger bids and asserted its commitment to their current offer.

The utility, which diversified into the water business last year with its $1.6 billion acquisition of Bridgeport's Aquarion Water Co., pushed back Tuesday after Connecticut Water last week announced it amended its $750 million merger with California's SJW Group in an effort to solicit other proposals for 45 days.

Connecticut Water had used a "go-shop" provision, which allows companies to seek competing bids without upending its current agreements, to reassure its shareholders of its pending agreement with SJW Group. The action allows them to review and negotiate bids through July 14.

The water utility had also invited Eversource to make a new acquisition offer after shooting down the utility's unsolicited April 5 bid of $63.50 per share in favor of SJW Group's offer now worth $64.72 per share -- based on its closing share price as of April 25 .

But Eversource officials said Connecticut Water's "severely limited" process "fails to reflect a sincere intention" as they have not provided access to necessary "due diligence" information and its senior management.

"Both of these actions would be standard practice in go-shop processes designed to solicit competitive bids on a level playing field," Eversource said in a statement.

Eversource says it will not participate in the flawed bidding process as it urges Connecticut Water shareholders to vote against SJW Group's "inferior" proposal.

Connecticut Water responded on Wednesday reaffirming its invitation for Eversource to participate in the "fair" public bidding process. But the water utility also slammed Eversource for its "pattern of seriously false" remarks made to "interfere" with its ability to receive the best deal possible.

Meanwhile, SJW Group is also fending off an unsolicited bid from California Water Service Group, which offered $68.25 a share, or approximately $1.9 billion, to purchase SJW Group.

Given the recent news, SJW Group's board of directors again pledged its unanimous support of the $750 million merger with Connecticut Water saying it will create "significant" value for its shareholders.

Under the "merger of equals", the combined company would be headquartered in California and be majority owned (60 percent) by SJW shareholders. Together they would serve more than 1.5 million customers, including more than 450,000 in Connecticut, and have over 700 employees.

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