XML 28 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
SJW Group and CTWS Merger Agreement
6 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]  
SJW GROUP AND CTWS MERGER AGREEMENT
SJW Group and CTWS Merger Agreement
On March 14, 2018, SJW Group, Hydro Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of SJW Group and CTWS entered into an Agreement and Plan of Merger with regard to an all-stock transaction. On May 30, 2018, SJW Group, Hydro Sub, Inc. and CTWS entered into an Amended and Restated Agreement & Plan of Merger (the “Merger Agreement”), which provided, among other things, CTWS the right to solicit alternative proposals from third parties and take certain other actions relating to a “go-shop process” through July 14, 2018. Under the terms of the Merger Agreement, Hydro Sub, Inc. will merge with and into CTWS (the “Merger”), with CTWS surviving the Merger as a wholly-owned subsidiary of SJW Group. Subject to the terms and conditions of the Merger Agreement, at the time at which the Merger becomes effective (the “Effective Time”), each share of common stock, without par value, of CTWS (“CTWS Common Share”), other than CTWS Common Shares directly or indirectly owned by the company, Hydro Sub, Inc., CTWS or any of their respective subsidiaries (in each case, other than any CTWS Common Shares held on behalf of third parties), issued and outstanding immediately prior to the Effective Time will be converted into the right to receive 1.1375 shares of common stock of SJW Group, par value $0.001.
The transaction, which is expected to close during the fourth quarter of 2018, has been unanimously approved by the boards of directors of both companies. Consummation of the Merger is subject to customary conditions, including, without limitation: approval by SJW Group's stockholders and CTWS shareholders, approval by certain regulators, the approval by the New York Stock Exchange of the listing of common stock of SJW Group to be issued as consideration in the Merger; the absence of any law or judgment prohibiting the consummation of the Merger or the Charter Amendment; the effectiveness of the registration statement on Form S-4 relating to the shares of common stock to be issued in the Merger; the accuracy of the representations and warranties of the parties (subject to customary materiality qualifiers); each party’s performance in all material respects of its obligations contained in the Merger Agreement; the absence of any material adverse effect on the company or CTWS since the date of the Merger Agreement, which has not been ameliorated or cured; and the receipt by each party of customary opinions from counsel to the effect that the Merger will qualify as a reorganization for U.S. federal income tax purposes. There is no guarantee that all of the closing conditions and approvals will be satisfied, and the failure to complete the proposed merger may adversely affect the financial conditions and results of operations of SJW Group.
In addition, SJW Group and CTWS have each received an unsolicited proposal. While each of the companies’ board of directors has determined that the respective proposals were neither superior proposals nor reasonably likely to lead to superior proposals, California Water Service Group filed on May 2, 2018 a preliminary proxy statement and on May 31, 2018 a definitive proxy statement to solicit proxies in opposition to the proposed merger, Eversource Energy filed on April 27, 2018 a preliminary proxy statement to solicit proxies in opposition to the proposed merger, and it is unclear what additional actions these third parties may take to further their proposals. In addition, on June 7, 2018, California Water Service Group filed a Schedule TO with the SEC and issued a press release announcing that it had commenced an unsolicited tender offer to acquire all outstanding shares of SJW Group for $68.25 per share in cash, following which, on June 15, 2018, SJW Group filed a Schedule 14D-9 with the SEC and issued a press release announcing the SJW Group board of director’s recommendation that stockholders reject the California Water Service Group tender offer and not tender their shares into the California Water Service Group tender offer and reaffirming SJW Group’s commitment to the proposed merger.