California-based SJW Group has offered to acquire rival water utility Connecticut Water Service in an all-cash deal for $1.1bn after amending their previous stock‐for‐stock merger agreement.
Under the new agreement, SJW Group will buy each share in Connecticut Water at $70.00.
Last month, the two water utilities had submitted an application to the Connecticut Public Utilities Regulatory Authority (PURA) for the approval of their merger of equals.
SJW Group chairman, president and CEO Eric Thornburg said: “SJW Group is entering this combination from a position of financial strength and with attractive growth opportunities.
“We are confident that under the terms of this revised transaction the combined company will be able to accelerate our growth, enhance the quality of our services and offerings for customers and deliver significant value to our shareholders and our communities.”
The amended merger agreement has been approved by the board of directors of the two companies. SJW Group said that the change to the original agreement is to help enable the closing of the merger and also to make sure that shareholders, customers, employees and communities associated with the two utilities realize significant benefits from their combination.
Boards of the two companies also opine that the $70.00 per share cash consideration will resolve any market distractions emerging from otherwise‐inferior proposals for Connecticut Water.
Last month, Connecticut Water Service was offered to be acquired by Eversource Energy at $64.00 per share in cash. The offer was rejected as it was not superior to the merger proposal from SJW Group.
Connecticut Water president and CEO David C. Benoit said: “We consider this combination with the SJW Group as a unique opportunity to deliver superior value to our shareholders and still honor the commitments made to our customers, employees and communities which are at the core of our brand and mission of delivering life sustaining, high quality water service to families and communities.”
The revised transaction, which will be subject to customary closing conditions and approvals, is anticipated to be completed in the first quarter of 2019.