Treacherous waters

7 June 2018 By Antony Currie Follow @AntonyMCurrie

A cold war between four utilities is heating up. Frustrated California Water is launching a hostile $1.4 bln bid for local rival SJW. SJW’s preferred Connecticut partner, also in Eversource’s sights, is grudgingly seeking other offers. It may be too late to keep watchdogs happy.

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California Water Service on June 7 said it has started an unsolicited tender offer to buy all outstanding stock of local rival SJW for $68.25 a share in cash, valuing the target at some $1.4 billion.

SJW’s board rejected California Water’s offer in April, preferring to stick with its March deal to buy Connecticut Water for $750 million.

Connecticut Water is itself facing a rival offer, from power and water utility Eversource, which it has rejected. On June 5 Eversource criticized the amended deal between Connecticut Water and SJW, saying the former’s board and management team are not seriously considering Eversource’s offer.

The merging companies on May 31 amended their agreement to add a so-called go-shop provision that allows Connecticut Water to contact other buyers. Eversource called this provision “severely limited.”

Connecticut Water on June 6 reiterated that it is committed to a “robust go-shop process with level playing field for all participants” and invited Eversource to participate.

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