Connecticut Water Service Inc. announced Friday that shareholders have approved a proposed $1.1 billion deal in which it will be purchased by SJW Group, a San Jose, Calif., water company.
Carol P. Wallace, chairman of the board of the Clinton-based company, said the deal will deliver value to shareholders and benefits to customers, employees and the communities the company serves.
About 92.5 percent of the shares voted at a special meeting Friday favored the deal. It represents about 68.7 percent of Connecticut Water’s outstanding common stock entitled to vote.
The transaction is set to close in the first quarter of 2019, subject to closing conditions and approvals from regulators.
Following the transaction’s close, Connecticut Water will continue to be led locally, with a New England regional headquarters in Connecticut.
Shareholders of Connecticut Water will receive $70 in cash for each share of Connecticut Water common stock owned. Shares closed Friday at $69.51, down about a half-percent.
SJW Group closed at $64.33, down a fraction of 1 percent.
Connecticut Water Service has rejected a purchase offer from Eversource, saying New England’s largest electric and gas utility undervalued it.
Eversource, which bought Aquarion Water Co. last year and is looking for another, similar acquisition, offered $750 million.
Connecticut Water later rejected a $64-a-share bid by Eversource, up from $63.50 previously offered.
A spokeswoman for Eversource declined to comment on the vote by shareholders of Connecticut Water.
Philip Lembo, chief financial officer of Eversource, told industry analysts on a conference call Nov. 2 when the utility released its third quarter financial results that it’s not involved “at this stage.”
“So far we are on the sideline there,” he said.
Eversource remains interested in expanding its presence in the industry, Lembo said.
“We we like the water growth story, there’s a lot of infrastructure that needs to be put into the ground,” he said.
Most of the growth will be through “smaller roll ups of distressed or local water companies” and larger mergers and acquisitions, Lembo said.
Connecticut Water serves 450,000 customers in Connecticut and Maine.
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