By Mitchell Young
CLINTON: The water war over the purchase of Connecticut Water Service [Nasdaq: CTWS] is heating up and the rhetoric at least is nearing a boiling point. CWS announced that it would be open to bids through July 4 in addition to the purchase it had previously agreed to, from the San Jose Water Group [NYSE:SJW].
On June6 the company released a statement in response to criticism from Eversourcethe statement reiterated it was open to new offers “including one from Eversource [NYSE: ES].”
Eversource had submitted a formal offer for purchase of CTWS on April 17 but it was rejected by CTWS’s board. In the company’s statement to solicit new bids said that it was open to Eversource’s bid but that it was inadequate and “did not fairly value” the company.
Apparently that turned up the heat in Boston as Eversource released a statement on June 6 saying it “strongly criticized the recently disclosed amendments to the [existing, with SWJ] merger agreement” and that the recent actions taken by Connecticut Water reinforce that its board and management team are not seriously considering the superior proposal by Eversource.”
The utility giant says that CTWS isn’t really serious about its offer saying “it’s continuing to attempt to solidify San Jose Water as the acquirer.”
CTSW fired back with saying, “we reiterate our invitation for Eversource to participate in the fair and open go-shop process.” Adding Eersource should “cease its pattern of seriously false statements that seem designed to interfere unfairly with the ability of Connecticut Water shareholders to receive the best possible transaction.”
Eversource claims that CTWS isn’t proving it the necessary information it needs saying, “Connecticut Water has not provided access to due diligence information that is not already publicly available, nor has it provided access to the company’s senior management. Both of these actions would be standard practice.”
While CTWS has defended a $28.1 “break up fee“ in its amendment agreement with SJW, but Eversource says it’s an impediment in a purchase saying CTWS “refused to eliminate or reduce” the fee.”
Finally Eversource challenged the integrity of CTWS’s proposal to solicit new bids saying
“Eversource believes that the go-shop process has been designed to create the illusion that Connecticut Water’s board is finally fulfilling its fiduciary duties without it actually doing so.”
As part of its response to Eversource, the company challenged Eversource’s specific criticisms saying “As is typical in the first round of a go-shop process, indications of interest are to be submitted based on publicly available information as well as Connecticut Water's financial projections”, adding the “break up” fee was part of their original agreement with SJW.