Connecticut Water Service announces amendment to merger agreement with SJW Group
Staff Writer |
Connecticut Water Service announced that it and SJW Group have amended the terms of the companies' merger agreement.
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The amended agreement, which was unanimously approved by the Connecticut Water board of directors, includes a new go-shop provision, pursuant to which Connecticut Water, with the assistance of its financial advisors, will actively solicit proposals for an alternative merger, acquisition or other strategic transaction involving Connecticut Water.
Connecticut Water has a right under the amended merger agreement to review and negotiate any alternative proposals received from third parties until 11:59 p.m. Eastern time on July 14, 2018.
In connection with the solicitation process, Connecticut Water and its financial advisors will begin soliciting third party indications of interest.
Eversource Energy will be among those invited to participate, however, Connecticut Water reaffirmed that the board does not believe that Eversource's current $63.50 per share proposal is a superior proposal to the SJW Group merger agreement.
Moreover, the Connecticut Water board has unanimously determined that it would not agree to a transaction with Eversource on the terms currently proposed, regardless of the outcome of the proposed SJW group merger, because the Connecticut Water board believes that the current Eversource proposal substantially undervalues Connecticut Water.
At this time, Connecticut Water remains subject to the SJW Group merger agreement, and the Connecticut Water board has not changed its recommendation in favor of the merger of equals with SJW Group.
As previously announced on March 15, 2018, under the terms of the 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, 2018.
Following closing of the transaction, Connecticut Water shareholders will own approximately 40 percent of the combined company and SJW Group shareholders will own approximately 60 percent, on a fully diluted basis. ■