Bidding war erupts for Maine Water Co.'s parent firm
Courtesy / Connecticut Water Service Inc.
Connecticut Water Service Inc., headquartered in Clinton, Conn., and the owner of Maine Water Co., is fighting off an unsolicited acquisition bid from Eversource Energy. It said a news release that it plans to stick with the proposed "merger of equals" with the California-based SJW Group that was announced earlier this year.
Connecticut Water Service Inc., parent company of Maine Water Co., is fighting off Eversource Energy’s $750 million bid to derail its proposed merger with California-based SJW Group.
Eversource Energy, New England's largest energy company, announced late Friday it is seeking proxies from Connecticut Water shareholders to vote against the merger. Eversource, which diversified into the water business last year with its $1.68 billion acquisition of Bridgeport, Conn.-based Aquarion Water Co., is urging Connecticut Water shareholders to force Connecticut Water’s board to “seriously discuss” what it is characterizing as its “superior proposal” to purchase Connecticut Water.
“We believe that our proposal to acquire Connecticut Water is a compelling offer that is in the best interest of both companies’ shareholders, employees, customers and local communities,” said Eversource Chairman, President and CEO Jim Judge. “We are disappointed that Connecticut Water’s board of Directors has been unwilling to engage in constructive discussions with us regarding our superior proposal and we urge Connecticut Water shareholders to oppose all proposals related to the SJW Group transaction in order to maximize the value of their shares.”
Connecticut Water slammed Eversource Energy’s bid to pick up proxy voters, calling it an “unsolicited acquisition proposal” and an “overt attempt to derail the SJW Group merger of equals” that Connecticut Water’s board unanimously approved as delivering greater value to its shareholders.
“Eversource’s unwarranted actions serve as an obstacle to completing the SJW merger,” Carol Wallace, chairman of Connecticut Water’s board of directors, said in a news release on Saturday. “The independent directors of the Connecticut Water board concluded that the Eversource acquisition proposal was not a superior proposal or reasonably likely to lead to a superior proposal and the board unanimously reaffirmed its intention to recommend that all Connecticut Water shareholders vote for the SJW Group merger.”
In its news release on Friday, Eversource characterized its $63.50 per share in cash and/or in Eversource common shares as a “superior alternative to the all-stock transaction proposed” in the SJW-Connecticut Water merger agreement.
“Upon completion of a transaction, Eversource would seek to combine Connecticut Water and Aquarion to form a leading water utility dedicated exclusively to providing communities in Connecticut and other parts of New England with premier service quality and a highly reliable water supply into the future,” the company stated in its release.
Waiting period ends
In a joint news release issued this morning, SJW Group (NYSE: SJW) and Connecticut Water Service, Inc. (NASDAQ: CTWS) announced that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the companies’ merger of equals announced on March 15.
The transaction is on track to close during the fourth quarter of 2018, the companies stated.
Under the terms of the companies’ agreement, Connecticut Water shareholders will receive 1.1375 shares of SJW Group common stock for each share of Connecticut Water common stock they own, the equivalent of $64.72 per share, based on SJW Group’s closing stock price as of April 25.
SJW Group and Connecticut Water shareholders will own 60% and 40%, respectively, of the combined company at close.
Connecticut Water said that its merger with the SJW Group is expected to immediately add to the bottom line for Connecticut Water and that profitability will not be “dependent on cost savings or job cuts.”
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