CT Water to solicit alternative merger proposals

Photos | Contributed Killingworth Reservoir is among 253 in-state reservoirs and wells Connecticut Water Service Inc. taps to provide potable water to about one in 10 Connecticut residents.

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By Joe Cooper

After nixing competing bids, Clinton-based Connecticut Water Service Inc. says it amended its $750 million merger with California's SJW Group in an effort to solicit other proposals.

Connecticut Water announced Thursday it employed an amendment provision that allows companies to seek competing bids. The public process, the company says, will allow shareholders to have “full confidence” in its coming merger or acquisition.

Under the provision, Connecticut Water is allowed to review and negotiate proposals through July 14.

Carol Wallace, chairman of Connecticut Water’s board of directors, said in a statement the group has not changed its recommendation in favor of the SJW Group merger agreement, which would create the nation’s third largest water utility, inked in March.

“We believe this additional step and public process by the board is appropriate to allow all of our shareholders to have full confidence in the company’s strategic direction and to know that every viable alternative has been explored,” Wallace said.

Connecticut Water on Thursday also invited Eversource Energy to the bidding table even though its board believes the utility's April 5 unsolicited bid of $63.50 per share to buy the Clinton-based water utility is a lesser offer.

Meanwhile, Eversource diversified into the water business last year with its $1.68 billion acquisition of Bridgeport-based Aquarion Water Co.

Following Thursday's announcement, Eversource spokeswoman Caroline Pretyman said via email the utility is currently reviewing the amended merger agreement.

Connecticut water’s “merger of equals” with SJW was originally valued at $61.86 per share, but the value of the deal since then has gone up to $64.72 per share.

Under the current transaction, Connecticut Water shareholders would own approximately 40 percent of the combined company and SJW would own the remaining 60 percent.

SJW Group has also drawn an unsolicited takeover bid since inking the March agreement.

California Water Service Group of San Jose made an offer to acquire SJW Group for $68.25 a share, or approximately $1.9 billion.

SJW's board, however, rejected the California Water's April 4 offer.

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CT Water, suitor amend $1B merger pact