Eversource Confirms Full Terms of Revised Superior Proposal to Connecticut Water

Eversource Energy (NYSE: ES) today confirmed that it has submitted a
revised proposal to acquire Connecticut Water Service, Inc. (Nasdaq:
CTWS), which it believes provides a superior alternative to the
previously agreed takeover of Connecticut Water by SJW Group (NYSE: SJW)
(“San Jose Water”).

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Eversource Confirms Full Terms of Revised Superior Proposal to Connecticut Water (Graphic: Business Wire).

Under the terms of Eversource’s superior proposal, Eversource would
acquire all of the outstanding shares of Connecticut Water common stock
for $64.00 per share in cash and/or in Eversource common stock at the
election of Connecticut Water shareholders. If the proposed transaction
with San Jose Water is terminated with no break fees payable by
Connecticut Water, Eversource would increase its offer to $66.00 per
share of Connecticut Water. In either scenario, Eversource’s proposal
far exceeds the $61.86 per share offered by San Jose Water as well as
the midpoint of the Connecticut Water standalone discounted cash flow of
$50.90 per share that Connecticut Water’s own financial advisors
disclosed as part of its fairness opinion analysis. Additionally,
Connecticut Water shareholders electing to receive Eversource stock
would receive 76% dividend accretion6 compared to 2% dividend
accretion in a transaction with San Jose Water.

(1) Midpoint of Connecticut Water’s financial advisor’s discounted cash
flow range of $40.42-$61.38 per Connecticut Water share, as disclosed in
its fairness opinion analysis summarized in SEC reports; (2) Connecticut
Water’s undisturbed share price, as of March 14, 2018; (3) Implied value
of San Jose Water’s offer per Connecticut Water share as of March 14,
2018, the day before announcement, calculated using San Jose Water’s
undisturbed share price as of March 14, 2018 of $54.38 multiplied by the
exchange ratio of 1.1375x; (4) Eversource’s superior proposal, submitted
on July 2, 2018; (5) If the proposed transaction with San Jose Water is
terminated with no break fees payable by Connecticut Water, Eversource
would increase its offer to $66.00 per share of Connecticut Water. (6)
The 76% dividend uplift is based on the $64.00 per share base offer, the
closing price of Eversource’s common stock on July 10, 2018, and the
annualized quarterly cash dividend of $0.3125 per share declared by
Connecticut Water on May 10, 2018.

As a tangible sign of Eversource’s commitment to a quick and efficient
transaction close, Eversource has also proposed an incremental “ticking
fee” should Eversource not achieve all required regulatory approvals
within eight months of deal announcement. This “ticking fee” would
result in a $0.50 per share increase to the offer price paid to
Connecticut Water shareholders for each subsequent calendar quarter
required to receive regulatory approvals following the eight-month
deadline. This stands in stark contrast to San Jose Water’s inferior
proposal, which would require an extensive regulatory review process in
San Jose Water’s home state of California as well as in Connecticut and
Maine, where San Jose Water has no operations.

Despite Connecticut Water’s claims to the contrary, Eversource’s revised
superior proposal includes extensive and specific commitments to
customers, communities and employees. These include: a base rate freeze
for customers through 2022; the doubling of Connecticut Water’s
charitable contributions to the communities it serves; and the retention
of key executives and employees.

Eversource submitted its revised superior proposal confidentially on
July 2, 2018 in hopes of engaging productively following an initial
meeting Eversource requested on June 29, 2018 between Eversource
Chairman and Chief Executive James Judge and Connecticut Water Chairman
Carol Wallace and Chief Executive David Benoit. Contrary to its claims
in its July 13, 2018 press release, Connecticut Water’s board provided
no operating or financial information during or subsequent to this
meeting. Connecticut Water’s board then rejected Eversource’s superior
proposal and refused to engage unless Eversource increased its offer to
at least $69.50 per share. Eversource believes this is an unrealistic
position that is wholly inconsistent with Connecticut Water’s own
previously disclosed financial analysis as well as current market
trading dynamics.

Eversource believes that the fact that Connecticut Water’s board is
making this $69.50 per share ultimatum while seeking shareholder
approval for a transaction that it has valued at $61.86 once again
demonstrates that the board has shown no interest in carrying out its
fiduciary duties to pursue the best value available for its shareholders
and other constituencies. Eversource has publicly confirmed the full
terms of its improved superior proposal so that Connecticut Water
shareholders are not misled by their board into accepting an inferior
transaction with San Jose Water.

Eversource looks forward to making its case directly to Connecticut
Water shareholders and regulators and will continue to urge Connecticut
Water shareholders to vote “AGAINST” the inferior San Jose Water
proposal by completing the BLUE proxy card once Eversource
publicly files its definitive proxy materials.

The full text of two letters that Eversource recently submitted to
Connecticut Water’s board are included below:

July 2, 2018

Mr. David C. BenoitPresident and Chief Executive OfficerConnecticut
Water Service, Inc.93 West Main StreetClinton, CT 06413

Dear David:

Thank you and Carol for the meeting on June 29. It was nice to meet you
both. I very much appreciated the opportunity to discuss our interest in
Connecticut Water, discuss the great potential for the combined company,
and discuss what we believe to be a superior proposal compared to your
proposed transaction with SJW Group.

As mentioned at our meeting, I am submitting in writing a revised
proposal to acquire Connecticut Water under terms we believe are in the
best interest of the customers, employees, suppliers, local communities
and shareholders of Connecticut Water due to the greater benefits
achievable through an Eversource transaction. We think that both the
terms of our improved superior proposal and the environment in which you
evaluate our improved proposal are very important considerations.

Eversource proposes to acquire all the outstanding shares of Connecticut
Water common stock for $64.00 per share in cash and/or in Eversource
common stock at the election of Connecticut Water shareholders. If your
proposed transaction with SJW is terminated with no break fees payable
by you, we would increase our offer to $66.00 per Connecticut Water
share. Additionally, as a tangible sign of our commitment to a quick and
efficient transaction close, we would be willing to offer an incremental
“ticking fee” should Eversource not achieve all required regulatory
approvals within eight months of deal announcement. This “ticking fee”
would result in a $0.50 per share increase to the offer price paid to
Connecticut Water shareholders for each subsequent calendar quarter
required to close the transaction following the eight-month deadline.

Connecticut Water shareholders electing to receive Eversource stock as
consideration would realize the equivalent of a 77% dividend uplift
based on the $64.00 per share base offer, the closing price of
Eversource’s common stock on June 29, 2018, and the annualized quarterly
cash dividend of $0.3125 per share declared by Connecticut Water on May
10, 2018.

Our proposal also commits to the following benefits for Connecticut
Water customers, employees, suppliers and local communities post-closing:

These substantial improvements are intended to convey a very clear
message that we respect and value the Connecticut Water Platform and we
believe that this transaction is materially better for all constituents
than the contemplated transaction with SJW. In addition, we believe this
improved offer represents a superior alternative to Connecticut Water’s
standalone proposition.

Eversource has a market capitalization of approximately $19 billion and
is an A+ rated company by Standard & Poor’s, making Eversource a strong
financial partner for the transaction. There would be no financing
contingency as part of the transaction.

Eversource has consistently demonstrated credibility, expertise, and
responsiveness in its proceedings before the Connecticut Public
Utilities Regulatory Authority and other regulatory bodies and has a
strong track record for successful regulatory outcomes. In particular,
Eversource has considerable experience in obtaining regulatory approvals
required for utility mergers and acquisitions. This is evidenced through
our recent acquisition of Aquarion Water Company, for which we obtained
regulatory approvals in four states (including Connecticut and Maine)
and completed the transaction within five months from the regulatory
filing date and within six months from the announcement of the
transaction. Additionally, Eversource is uniquely positioned to create
substantial benefits for customers served by Connecticut Water, while
preserving local ownership and accountability.

In summation, Eversource’s combination with Connecticut Water would be a
compelling, superior alternative to the SJW transaction for Connecticut
Water’s customers, employees, suppliers, communities and shareholders.
An Eversource transaction would also leverage the geographical proximity
of the Connecticut Water and Aquarion systems to enable cost-effective
infrastructure investment and support regional economic growth.

I have reviewed this opportunity with Eversource Board members who
support the submission of this proposal. For the time being, we are
planning to keep this proposal confidential to allow the Connecticut
Water Board and its advisors ample time to analyze and engage with us
constructively. We would appreciate your response by July 9, 2018. We
are prepared to engage with you immediately and to reach a definitive
agreement as expeditiously as possible. For the avoidance of doubt, this
proposal is a non-binding indication of interest, subject to
confirmatory due diligence, which we believe can be completed
expeditiously and within two weeks of receiving access to your data
room. A binding obligation with respect to this transaction will result
only from the execution of a definitive agreement containing terms and
conditions that are mutually acceptable to the parties.

We look forward to your prompt response.

Sincerely,

James J. JudgeChairman, President and Chief Executive OfficerEversource
Energy

+ + +

July 11, 2018

Mr. David C. BenoitPresident and Chief Executive OfficerConnecticut
Water Service, Inc.93 West Main StreetClinton, CT 06413

Dear David:

Thank you and Carol for the call and subsequent letter on July 7. We
appreciate your swift response to our improved proposal that included a
price increase to $64.00 and substantial customer, charitable and other
commitments. We were very disappointed with your unwillingness to
substantially engage and surprised by your ask, and the lack of
rationale for our bid having to exceed $69.50 per share for you to
engage in discussions.

We firmly believe that our revised proposal to acquire all of the
outstanding shares of Connecticut Water common stock for $64.00 per
share in cash and/or in Eversource common stock, along with the 76%
dividend uplift and the extensive and specific customer, employee, and
charitable benefits, is superior compared to your proposed sale to San
Jose Water that has questionable benefits for all constituents. We
continue to struggle to envision the synergies required to justify your
valuation ask that would be derived from combining two utilities on
opposite sides of the country. The trading prices currently in the
market certainly imply the expectation that your transaction with San
Jose Water will not close.

Additionally, we believe our revised offer of $64.00 per share is also
clearly superior to your standalone valuation. As disclosed in your SEC
filings, your own advisor Wells Fargo valued Connecticut Water at a
midpoint discounted cash flow of $50.90 per share. Our offer represents
a 26% premium to your own advisor’s midpoint DCF valuation and
represents an extremely compelling 27.5x multiple to Connecticut Water’s
estimated 2018 earnings per share, which is at the high end of recent
utility transactions. We are confident that your shareholders will also
find our offer compelling.

Furthermore, we have included a meaningful ticking fee if our
transaction takes longer than 8 months to get regulatory approval and we
have stated that should you and San Jose Water mutually terminate your
agreement and eliminate any termination fees to be paid, we would
increase our offer to $66.00 per share, delivering further value to your
shareholders. We strongly prefer to negotiate privately and encourage
you to reconsider what we think is an unreasonable ask of at least
$69.50 per share to engage. In your recent letter to us, you set a
deadline of July 12 for our response. We’d ask that you please respond
by close of business on that date if there is a more reasonable position
to discuss.

Regards,

James J. JudgeChairman, President and Chief Executive OfficerEversource
Energy

For more information on Eversource’s superior proposal for Connecticut
Water, please visit www.betterCTwater.com.

About Eversource:Eversource (NYSE: ES) transmits
and delivers electricity and natural gas and supplies water to
approximately 4 million customers in Connecticut, Massachusetts and New
Hampshire. Recognized as the top U.S. utility for its energy efficiency
programs by the sustainability advocacy organization Ceres, Eversource
harnesses the commitment of its more than 8,000 employees across three
states to build a single, united company around the mission of safely
delivering reliable energy and water with superior customer service. For
more information, please visit our website (www.eversource.com).
For more information on our water services, visit www.aquarionwater.com.

Forward Looking Statements:This news release
includes statements concerning Eversource Energy’s (“Eversource”)
expectations, beliefs, plans, objectives, goals, strategies, assumptions
of future events, future financial performance or growth and other
statements that are not historical facts. These statements are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. In some cases, readers can
identify these forward-looking statements through the use of words or
phrases such as “estimate,” “expect,” “anticipate,” “intend,” “plan,”
“project,” “believe,” “forecast,” “should,” “could” and other similar
expressions. Forward-looking statements are based on current
expectations, estimates, assumptions or projections and are not
guarantees of future performance. These expectations, estimates,
assumptions or projections may vary materially from actual results.
Accordingly, any such statements are qualified in their entirety by
reference to, and are accompanied by important factors that could cause
our actual results to differ materially from those contained in our
forward-looking statements, including, but not limited to, in the case
of Eversource’s proposal to acquire Connecticut Water, the fact that we
may fail to reach agreement on terms of a potential transaction with
Connecticut Water, or fail to complete any such transaction on a timely
basis or on favorable terms; the negative effects on Connecticut Water’s
business resulting from the pendency of the merger proposals; that we
may not receive regulatory approvals within the expected timeframe; that
we may not be able to close the proposed transaction with Connecticut
Water promptly and effectively, or at all; cyber-attacks or breaches,
including those resulting in the compromise of the confidentiality of
our proprietary information and the personal information of our
customers; acts of war or terrorism or grid disturbances that may
disrupt our transmission and distribution systems; ability or inability
to commence and complete our major strategic development projects and
opportunities; actions or inactions of local, state and federal
regulatory, public policy and taxing bodies; substandard performance of
suppliers; climate change; disruption to our transmission and
distribution systems; new technology and conservation of energy;
contamination or failure of our water supplies; unauthorized access to
confidential and proprietary information; changes in laws, regulations
or regulatory policy; changes in economic conditions, including impact
on interest rates, tax policies, and customer demand and payment
ability; changes in business conditions, which could include disruptive
technology related to our current or future business model; changes in
weather patterns, including extreme weather and other effects of climate
change; reputational risk; changes in levels or timing of capital
expenditures; technological developments and alternative energy sources;
disruptions in the capital markets or other events that make
Eversource’s access to necessary capital more difficult or costly;
developments in legal or public policy doctrines; changes in accounting
standards and financial reporting regulations; actions of rating
agencies; and other presently unknown or unforeseen factors.

Other risk factors are detailed in Eversource’s reports filed with
the Securities and Exchange Commission (SEC) and updated as necessary,
and are available on the SEC’s website at www.sec.gov.
All such factors are difficult to predict and contain uncertainties that
may materially affect Eversource’s actual results many of which are
beyond our control. You should not place undue reliance on the
forward-looking statements; each speaks only as of the date on which
such statement is made, and, except as required by federal securities
laws, Eversource undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the
date on which such statement is made or to reflect the occurrence of
unanticipated events.

Certain Information Regarding Participants:Eversource and
certain of its trustees, executive officers and employees may be deemed
participants in the solicitation of proxies from Connecticut Water
shareholders in connection with Connecticut Water’s Special Meeting of
Shareholders. Information about the interests in Connecticut Water of
Eversource and such trustees, executive officers and employees is set
forth in a preliminary proxy statement that was filed with the SEC on
June 14, 2018 (the “Eversource Proxy”).

Additional Information:Investors are urged to
read in its entirety the Eversource Proxy, which is available now, and
the definitive proxy statement and any other relevant documents filed
with the SEC when they become available, because they contain (or will
contain) important information. The Eversource Proxy, and any other
documents filed by Eversource with the SEC, may be obtained free of
charge at the SEC web site at www.sec.gov.
The Eversource Proxy and such other documents may also be obtained free
of charge by contacting D.F. King & Co., Inc. at: (800) 967-5071 or 48
Wall Street, 22nd Floor, New York, New York 10005.

This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the U.S. Securities Act of 1933, as amended. This
communication relates to a proposal that Eversource has made for a
business combination transaction with Connecticut Water. In furtherance
of this proposal and subject to future developments, if Eversource and
Connecticut Water agree on a negotiated transaction, Eversource and
Connecticut Water may file one or more registration statements, tender
offer statements, prospectuses, proxy statements or other documents with
the SEC. This communication is not a substitute for any registration
statement, tender offer statement, prospectus, proxy statement or other
document Eversource and/or Connecticut Water file with the SEC in
connection with the proposed transaction. Investors are urged to read
carefully the registration statement(s), tender offer statement(s),
prospectus(es), proxy statement(s) and other documents filed with the
SEC when they become available because they will contain important
information about Eversource, Connecticut Water and the proposed
transaction. Investors may obtain free copies of these documents (when
they are available) and other related documents filed with the SEC at
the SEC’s web site at www.sec.gov
or by directing a request to Eversource’s Investor Relations department
at (860) 665-5154 or by email to jeffrey.kotkin@eversource.com.

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