SJW Group Rejects Unsolicited Non-Binding Indication of Interest from California Water Service Group

SJW Group (NYSE:SJW) confirmed today that it has rejected an unsolicited, non-binding indication of interest it received from California Water Service Group (NYSE: CWT) (“Cal Water”) regarding a potential proposal to acquire all issued and outstanding shares of SJW Group for $68.25 per share in cash.

The SJW Group Board of Directors, following a careful and thorough review in consultation with SJW Group’s management and legal and financial advisors consistent with its fiduciary duties, determined that Cal Water’s non-binding indication of interest neither constituted nor was reasonably likely to lead to a superior proposal as defined in SJW Group’s merger agreement with Connecticut Water Service, Inc. (NASDAQ: CTWS) (“Connecticut Water”).

The SJW Group Board concluded that Cal Water’s all-cash transaction described in the non-binding indication of interest would not permit SJW Group’s shareholders the opportunity to share in the benefits expected from being shareholders of the combined company with Connecticut Water. The long-term benefits of the merger of equals transaction with Connecticut Water include increased scale, enhanced financial strength and geographic diversity; expected continued payment of dividends over time; anticipated higher future growth profile and associated share price appreciation; the tax-free nature of the merger of equals with Connecticut Water; and significant earnings accretion – all of which the SJW Group Board believes are unique to the proposed merger of equals transaction.

In addition, Cal Water has not stated its plans for all employees should it acquire SJW Group, whereas SJW Group has publicly stated that it will continue to honor its commitments to all employees and believes that the merger of equals with Connecticut Water will provide better opportunities and outcomes for all employees of both companies.

The SJW Group Board determined that there is a significant risk Cal Water’s proposed transaction would not close in a reasonable period of time, if at all, due to the potentially protracted regulatory review taking as long as 18 months, the substantial amount of financing that the proposed all-cash transaction requires and the uncommitted nature of Cal Water’s sources of financing.

The SJW Group Board continues to be committed to its existing merger agreement with Connecticut Water, which remains on track to close during the fourth quarter of 2018. This combination will create a leading water utility company positioned to drive growth, serve customers and create opportunities for all employees across a national footprint. The SJW Group Board continues to believe the merger of equals provides the shareholders of both SJW Group and Connecticut Water with the best opportunity for value creation over the long term and yields benefits for both companies’ customers, employees and communities.