Maine Water's parent company rejects unsolicited bid from Eversource Energy
Courtesy / Connecticut Water Service Inc.
Connecticut Water Service Inc., headquartered in Clinton, Conn., and the owner of Maine Water Co., has rejected an unsolicited acquisition bid from Eversource Energy. It said a news release that it plans to stick with the proposed $750 million merger with the California-based SJW Group that was announced earlier this year.
Connecticut Water Service Inc. (NASDAQ: CTWS), parent company of Maine Water Co., has rejected an unsolicited acquisition bid from Eversource Energy that was made several weeks after the water utility announced a proposed $750 million merger with the California-based SJW Group.
Eversource, New England's largest energy delivery company, with approximately 3.7 million electric and natural gas customers in Connecticut, Massachusetts and New Hampshire, diversified into the water business last year with its $1.68 billion acquisition of Bridgeport-based Aquarion Water Co. It disclosed Thursday that it attempted to disrupt the pending merger between Connecticut Water and SJW Group by making its own bid to buy the Clinton, Conn.-based water utility.
Eversource (NYSE: ES) said it offered Connecticut Water $63.60 per share in cash and/or stock. By comparison, SJW Group (NYSE: SJW) offered in mid-March the equivalent of $61.86 per share, or about $750 million in aggregate, for each share of CTWS common stock. Based on each company's closing share price as of March 14, the combined company would have a pro forma $1.9 billion equity value and a $2.6 billion enterprise value.
The value of the deal since then has gone up to $63.70 per share, according to Hartford Business Journal, Mainebiz’s sister publication.
Carol Wallace, chair of the Connecticut Water board of directors, said the CTWS board and management team “carefully reviewed the unsolicited acquisition proposal” but “remains firmly and unanimously in support of the SJW Group merger agreement.”
Hartford Business Journal reported that Eversource had expressed interest in a deal in 2017 and is trying to convince Connecticut Water shareholders, which still need to approve the SJW deal, that it would be a better marriage partner.
"We believe that our proposal represents a unique opportunity to deliver significant and immediate value to Connecticut Water's shareholders, customers, employees, and local communities," said Eversource Chairman, President and Chief Executive Officer Jim Judge. "As such, we were surprised and disappointed that Connecticut Water's board of directors has been unwilling to engage in discussions with us. We urge the board of Connecticut Water to act in the best interests of its shareholders by meeting with us to seriously discuss our compelling proposal."
Under the terms of the SJW deal, the combined company would have a California headquarters and be majority owned (60%) by SJW shareholders. Together they would serve more than 1.5 million customers and have over 700 employees, making it the third-largest investor-owned water and wastewater utility in the United States, with operations in Maine, Connecticut, California and Texas.
Connecticut Water became the largest investor-owned water utility in Maine in 2012 with its $53.5 million purchase of Aqua Maine and $19.8 million purchase of the Biddeford & Saco Water Co., which are both now under the name of Maine Water Co.
Maine Water Co. serves more than 32,000 customers, or approximately 85,000 people, in 21 communities across Maine.
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