CLINTON, Conn., Oct. 15, 2018 /PRNewswire/ -- Connecticut
Water Service, Inc. (NASDAQ: CTWS) today sent a letter to
shareholders in connection with the previously announced
transaction with SJW Group (NYSE: SJW). The Special Meeting of
Connecticut Water Shareholders to vote on the transaction will be
held on November 16, 2018.
The Connecticut Water Service Board of Directors unanimously
recommends that shareholders "go green" and vote
"FOR" the proposal to approve the SJW Group merger agreement
as well as all other proposals related to the SJW Group transaction
on the GREEN proxy card. Importantly, not voting has
the same effect as a vote against the transaction.
Highlights from the letter include:
- By going GREEN and voting "FOR" the SJW Group
transaction on the GREEN proxy card, shareholders are voting
to receive significant, certain, premium value of $70 per share in cash.
- The value that Connecticut Water shareholders will receive
represents a 33% premium to Connecticut Water's unaffected closing
stock price on March 14, 2018, the
last trading day before the original SJW Group transaction was
announced, and is on par with or exceeds the top end of valuations
for comparable transactions.
- Prior to announcing the original agreement with SJW Group in
March 2018, Connecticut Water's stock
had never closed above $63.55 per
share, which underscores the tremendous and immediate upside
created by this transaction.
- In addition to maximizing value for Connecticut Water's
shareholders, the SJW Group transaction provides significant
benefits for the Company's employees, customers and communities
that Connecticut Water believes are fundamental to being a
successful utility company.
The full text of the letter follows below:
CT WATER + SJW GROUP: AN IDEAL COMBINATION
THAT DELIVERS SIGNIFICANT SHAREHOLDER VALUE
GO GREEN AND VOTE "FOR" THE SJW
GROUP TRANSACTION TODAY
October 15,
2018
Dear Fellow Shareholder,
On November
16, 2018, Connecticut Water will hold a Special Meeting of
Shareholders to vote on the proposed acquisition of our company by
SJW Group. Your vote is important, no matter how many or how few
shares you own. Moreover, not voting is the same as voting
against the SJW Group transaction, so please, go green and
vote "FOR" the proposal to approve the SJW Group
merger agreement and all related proposals on the enclosed
green proxy card today.
THE SJW GROUP TRANSACTION
DELIVERS COMPELLING VALUE
TO CONNECTICUT WATER SHAREHOLDERS
Delivers Certain, Significant,
Premium Value
The $70 per share cash consideration in our agreement
ensures that Connecticut Water shareholders receive both certain
and significant value. In fact, this price represents a 33%
premium to Connecticut Water's unaffected closing stock
price1 and is immediately payable to Connecticut
Water shareholders at the close of the transaction, which we are on
track to complete in the first quarter of 2019.
Exceeds Our All-Time
High
Under the terms of our agreement
with SJW Group, you will receive $70 in cash for each share of Connecticut
Water common stock you own. Notably, prior to announcing the
original agreement with SJW Group in March
2018, Connecticut Water's stock had never closed above
$63.55 per share, which underscores
the tremendous and immediate upside created by this
transaction.
Represents Among the Best
M&A Valuations in Our Industry
The Connecticut Water Service
Board of Directors takes its responsibility to shareholders
seriously, and we worked hard to ensure that our shareholders
received full value for their shares. $70 per share represents a highly attractive
Price-to-Earnings (P/E) multiple of 30.1x Connecticut Water's
earnings per share at the end of 2017. Comparable transactions have
delivered 23.4x on average. In other words, the value you are
receiving through the SJW Group transaction is on par with or
exceeds the top end of valuations for comparable transactions.
In conceding that it could not
match the value delivered through the SJW Group agreement, even
Eversource Energy, which submitted an unsolicited, inadequate,
below-market $64 per share proposal
to acquire Connecticut Water, acknowledged that Connecticut Water
shareholders were receiving a "huge premium."4
THE SJW GROUP TRANSACTION ALSO DELIVERS
COMPELLING BENEFITS TO
CONNECTICUT WATER'S
STAKEHOLDERS
In addition to maximizing value
for Connecticut Water's shareholders, the SJW Group transaction
provides significant benefits for our employees, customers and
communities. Following the close of the transaction, Connecticut
Water will continue to be led locally with a New England region
headquarters in Connecticut. The
same trusted team of passionate, dedicated employees who support
our company and operating utilities today will continue to support
our company and operating utilities after the transaction
closes.
We have proudly made numerous
commitments to demonstrate how we will maintain our focus on
superior customer service and environmental stewardship with
qualified local water professionals continuing to provide safe,
reliable water service. Among other things, we have committed
to:
- No layoffs or job
cuts as a result of the combination
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- No use of
Connecticut sources or supplies for the out-of-state sister
companies
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- No changes in
customer rates as a result of the combination
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- Continue
responsible water resource management programs
|
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- Continued superior
customer service with annual customer satisfaction surveys
conducted by an independent consultant
|
- Funding for our
H2O customer assistance program at the same or higher
levels than the past three years
|
|
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- ~$200M annual
capital investments across combined operations
|
- Corporate
Responsibility Committee will continue to drive efforts to reduce
environmental footprint and implement sustainable business
practices with annual reporting to the Board of
Directors
|
|
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- Community liaisons
and outreach efforts in all service towns with at least annual face
to face meetings with each town CEO
|
- Employees will
remain active in state and environmental organizations and
participate in activities of Water Planning Council, WUCCs and
other workgroups or committees to further state water supply and
resource policies and planning
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- Ongoing community
investment, support and involvement
|
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|
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- Enhanced
environmental stewardship and continued industry leadership on
water conservation initiatives with an annual budget for customer
oriented conservation programs
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- Additional
notification and prioritization for open space and conservation for
certain company-owned lands
|
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YOUR VOTE IS IMPORTANT –
GO GREEN AND VOTE
"FOR" THE COMBINATION
WITH SJW GROUP
TODAY
By going green and voting
"FOR" the SJW Group transaction on the GREEN proxy card, you
are voting to receive significant, certain, premium value of
$70 per share in cash. You are also
voting "FOR" stakeholder benefits that we believe are
fundamental to being a successful utility company.
We urge you to vote TODAY
"FOR" the proposals related to the SJW Group
transaction by phone, Internet or by returning the enclosed
GREEN proxy card in the postage paid envelope provided.
On behalf of the Connecticut Water
Service Board of Directors, thank you for your continued support of
Connecticut Water.
Sincerely,
Carol P.
Wallace
Chairman, Connecticut Water Service, Inc. Board of Directors
Connecticut Water shareholders who have questions or would like
additional information should contact Connecticut Water's proxy
solicitors: Morrow Sodali, toll-free at (800) 662-5200 or by email
at CTWS@morrowsodali.com, or MacKenzie Partners, toll-free at
(800) 322-2885 or by email at CTWS@mackenziepartners.com.
To learn more about Connecticut Water's transaction with SJW
Group and the substantial value and significant benefits it will
provide, shareholders are encouraged to visit
www.sjw-ctws.com.
About CTWS
CTWS is a publicly traded holding company headquartered in
Clinton, Connecticut. CTWS is the
parent company of The Connecticut Water Company, The Maine Water
Company, The Avon Water Company, and The Heritage Village Water
Company. Together, these subsidiaries provide water service to more
than 450,000 people in Connecticut
and Maine, and wastewater service
to more than 10,000 people in Connecticut.
Cautionary Statement Regarding Forward-Looking
Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, as
amended. Some of these forward-looking statements can be
identified by the use of forward-looking words such as "believes,"
"expects," "may," "will," "should," "seeks," "approximately,"
"intends," "plans," "estimates," "projects," "strategy," or
"anticipates," or the negative of those words or other comparable
terminology.
The accuracy of such statements is subject to a number of risks,
uncertainties and assumptions including, but not limited to, the
following factors: (1) the risk that the conditions to the
closing of the transaction are not satisfied, including the risk
that required approval from the shareholders of Connecticut Water
for the transaction is not obtained; (2) the risk that the
regulatory approvals required for the transaction are not obtained,
on the terms expected or on the anticipated schedule; (3) the
effect of water, utility, environmental and other governmental
policies and regulations; (4) litigation relating to the
transaction; (5) the ability of the parties to the transaction
to meet expectations regarding the timing, completion and
accounting and tax treatments of the proposed transaction;
(6) the occurrence of any event, change or other circumstance
that could give rise to the termination of the transaction
agreement between the parties to the proposed transaction;
(7) changes in demand for water and other products and
services of Connecticut Water; (8) unanticipated weather
conditions; (9) catastrophic events such as fires,
earthquakes, explosions, floods, ice storms, tornadoes, terrorist
acts, physical attacks, cyber-attacks, or other similar occurrences
that could adversely affect Connecticut Water's facilities,
operations, financial condition, results of operations, and
reputation; (10) risks that the proposed transaction disrupts
the current plans and operations of Connecticut Water;
(11) potential difficulties in employee retention as a result
of the proposed transaction; (12) unexpected costs, charges or
expenses resulting from the transaction; (13) the effect of
the announcement or pendency of the proposed transaction on
Connecticut Water's business relationships, operating results, and
business generally, including, without limitation, competitive
responses to the proposed transaction; (14) risks related to
diverting management's attention from ongoing business operations
of Connecticut Water; (15) the trading price of Connecticut
Water's common stock; and (16) legislative and economic
developments.
In addition, actual results are subject to other risks and
uncertainties that relate more broadly to Connecticut Water's
overall business and financial condition, including those more
fully described in Connecticut Water's filings with the U.S.
Securities and Exchange Commission (the "SEC"), including, without
limitation, its annual report on Form 10-K for the fiscal year
ended December 31, 2017 and its
quarterly report on Form 10-Q for the period ended June 30, 2018. Forward-looking statements
are not guarantees of performance, and speak only as of the date
made, and neither Connecticut Water nor its management undertakes
any obligation to update or revise any forward-looking statements
except as required by law.
Additional Information and Where to Find It
This communication relates to the proposed acquisition of
Connecticut Water by SJW Group. In connection with the proposed
transaction, on October 2, 2018,
Connecticut Water filed a definitive proxy statement on Schedule
14A and the accompanying GREEN proxy card with the SEC.
SHAREHOLDERS OF CONNECTICUT WATER
ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ALL OTHER
RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC BECAUSE THEY
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders will be able to
obtain a copy of the definitive proxy statement and the other
documents filed by Connecticut Water with the SEC free of charge at
the SEC's web site, http://www.sec.gov, and shareholders of
Connecticut Water will also be able to obtain transaction-related
documents free of charge by directing a request to Connecticut
Water's Corporate Secretary, Kristen A.
Johnson, at Connecticut Water Service, Inc., 93 West Main
Street, Clinton, Connecticut
06413, or by telephone at 1-800-428-3985.
Participants in Solicitation
SJW Group and its directors and executive officers, and
Connecticut Water and its directors and executive officers, may be
deemed to be participants in the solicitation of proxies from the
holders of Connecticut Water's common stock in respect of the
proposed transaction. Information about the directors and
executive officers of SJW Group is set forth in the proxy statement
for SJW Group's 2018 Annual Meeting of Stockholders, which was
filed with the SEC on March 6,
2018. Information about the directors and executive officers
of Connecticut Water is set forth in the proxy statement for
Connecticut Water's 2018 Annual Meeting of Shareholders, which was
filed with the SEC on April 6, 2018.
Investors may obtain additional information regarding the interest
of such participants by reading the definitive proxy statement
regarding the proposed transaction, which was filed on October 2, 2018, and other relevant materials
filed with the SEC regarding the proposed transaction.
Connecticut Water Contacts
Daniel J. Meaney, APR
Director, Corporate Communications
(860) 664-6016
dmeaney@ctwater.com
Investors
Mike Verrechia / Bill Dooley
Morrow Sodali, LLC
(800) 662-5200
CTWS@morrowsodali.com
Dan Burch / Laurie Connell
MacKenzie Partners, Inc.
(800) 322-2885
CTWS@mackenziepartners.com
Media
Joele Frank, Wilkinson Brimmer
Katcher
Barrett Golden / Joseph Sala
(212) 355-4449
1 As of March 14, 2018,
the last trading day before the original SJW Group transaction was
announced.
2 Connecticut Water's all-time high unaffected closing
stock price prior to March 15, 2018,
the day the original SJW Group transaction was announced.
3 Connecticut Water's unaffected closing stock price on
March 14, 2018, the last trading day
before the original SJW Group transaction was announced.
4 Testimony from John M.
Moreira, Senior Vice President and Treasurer of Eversource
Energy, on October 1, 2018 to the
Connecticut Public Utilities Regulatory Authority.
5 Select electric, gas and water utility transactions
announced since January 1, 2016.
6 Average forward P/E multiple for selected
transactions, excluding the SJW Group transaction.
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SOURCE Connecticut Water Service, Inc.