Connecticut Water Service and a California water company announced Monday that federal regulators have granted early termination of the Hart-Scott-Rodino waiting period for their “merger of equals” as competing utility providers attempt to disrupt the $750-million deal.
The Federal Trade Commission has granted early termination of the merger’s waiting period to ensure the Clinton-based utility and SJW Group of San Jose, Calif., complete the transaction before year end, the companies said Monday.
The deal requires approval from each companies’ shareholders, the state’s Public Utilities Regulatory Authority (PURA), the Maine Public Utilities Commission and the Federal Communications Commission.
After the deal was announced in March, Eversource said it made an unsolicited bid to buy Connecticut Water Service on April 5.
Eversource said it offered Connecticut Water $63.50 per share in cash and/or stock. SJW Group initially agreed to pay Connecticut Water $61.86 per share, but the value of the deal since then went up to $64.72 per share. Meanwhile, California Water Service Group of San Jose made an unsolicited bid on April 4 to purchase SJW Group. California Water offered SJW $68.25 a share, or approximately $1.9 billion.
Still, Connecticut Water and SJW have reaffirmed their commitment to the “merger of equals,” stating the $750-million deal, which they say creates the nation’s third-largest water utility, is in the best interest for its shareholders.
“The boards of directors of SJW Group and Connecticut Water believe there is great value-creation potential for both companies’ shareholders in owning shares in a combined company that will be a leading, pure-play water company with the scale, management, financial strength and geographic diversity to excel operationally and financially,” the companies said in a joint statement Monday.
Meanwhile, Eversource and California Water are still working to block the mega deal, each arguing they are providing superior proposals to Connecticut Water and SJW shareholders.
Eversource on Friday said it informed the U.S. Securities and Exchange Commission it is seeking proxies from Connecticut Water shareholders, urging them to vote against the merger.
Carol Wallace, chairwoman of the Connecticut Water board of directors, rebuked Eversource’s “attempt to derail” the merger in an effort to promote their “inferior proposal and distract from its record of chronic underperformance and highly-publicized poor customer service.”
Wallace said Connecticut Water will not allow the utility’s “unwarranted actions” to block the unanimously approved merger agreement.
California Water has repeatedly attempted to discuss its “superior” proposal with SJW’s board, which refuses to negotiate after the board rejected the offer on April 13.
