Connecticut Water Service Inc. on June 18 said that it has concluded its "go-shop" period, receiving no offers or indications of interest to rival SJW Group's acquisition bid.
Through its financial advisers, Connecticut Water solicited alternative proposals from more than 50 companies, including Eversource Energy, which had previously expressed interest in acquiring the company, but none submitted a bid for consideration. The Connecticut Water board of directors then unanimously reaffirmed its support for San Jose, Calif.-headquartered SJW Group's proposal.
Having previously rejected Eversource's bid, Connecticut Water's board asked its shareholders to "ignore Eversource's obstructive communications campaign," adding that Eversource's bid of $63.50 per share significantly undervalues Connecticut Water.
"We are moving forward to seek approval from shareholders and regulators and look forward to completing our value-enhancing merger with SJW Group as planned," Connecticut Water Board Chairman Carol Wallace said in a news release.
Under the SJW Group/Connecticut Water "merger of equals," Connecticut Water shareholders would receive 1.1375 shares of SJW Group common stock for each share of Connecticut Water.
The merger is expected to form the third-largest investor-owned water and wastewater utility in the U.S., with total assets of $2.4 billion. The combination of the two companies is expected to be accretive by approximately 5% to 10% annually on an earnings-per-share basis for 2019 through 2022. Further, there are no plans for merger-related layoffs or job losses at the utilities in Connecticut, Maine, California and Texas, according to a company release.
Expected to be completed by the end of 2018, the merger is subject to the approval of the companies' stockholders, the Connecticut Public Utilities Regulatory Authority, the Maine Public Utilities Commission, and the Federal Communications Commission.
Wells Fargo Securities LLC serves as Connecticut Water's financial adviser and Sullivan & Cromwell LLP as its legal counsel.
Meanwhile, SJW Group is fending off a takeover bid by another California water utility, California Water Service Group, and on June 15 the SJW board rejected Cal Water's offer of $68.25 per share in cash.