Market Overview

California Water Service Group Files Preliminary Proxy Materials to Urge SJW Group's Stockholders to Vote Against Proposed Merger with Connecticut Water


Reaffirms Commitment to its All-Cash Proposal to Combine with SJW

California Water Service Group (NYSE:CWT) today announced it has filed
preliminary proxy materials with the U.S. Securities and Exchange
Commission to urge stockholders of SJW Group (NYSE:SJW) to vote against
the proposed merger of SJW and Connecticut Water (NYSE:CTWS).

"We strongly believe our $68.25 per share all-cash proposal delivers
superior value to SJW stockholders and is in the best interest of both
companies' stockholders," said Martin A. Kropelnicki, President and CEO
of California Water. "In our view, SJW's stock merger with Connecticut
Water forces SJW stockholders to forego substantial and immediate value
for the promise of long-term accretion that may never materialize, due
to the significant risk of operating a larger company with two separate
systems that are 3,000 miles apart in different regulatory environments."

Mr. Kropelnicki continued, "We believe the SJW Board would better serve
its stockholders by immediately meeting with us to discuss our proposal,
instead of continuing its emerging pattern of communication and
governance practices that hurt their stockholders, employees, customers,
and local communities. We stand ready to address directly with the SJW
Board any legitimate issue it may have with our all-cash proposal."

Absent engagement by the SJW Board, California Water will ensure that
SJW stockholders have all of the facts and resources necessary to
determine the best path forward for SJW. California Water is
communicating closely with employees, customers, and local communities
to outline the significant benefits the Company believes this common
sense combination with California Water would provide. For more
information on the many benefits of California Water's proposal, please

In its preliminary proxy materials, California Water highlighted the
benefits of its proposal for SJW stockholders, including the following:

  • SJW stockholders would receive in our view superior and immediate
    economic value
    with California Water's all-cash proposal, which
    exceeds SJW's all-time high closing share price, represents a 30%
    premium to SJW's closing stock price at the time of California Water's
    April 4, 2018 proposal, and represents a 20% premium to SJW's closing
    stock price on April 25, 2018, the day before the California Water
    proposal was announced.
  • In our view, California Water offers a clear path to completing the
    transaction in a timely manner.
    California Water's proposal is not
    subject to any financing contingency and the Company is confident it
    can move quickly to conduct due diligence, reach a definitive
    agreement, and obtain regulatory approvals.

California Water strongly believes that the SJW all-stock merger with
Connecticut Water is clearly inferior for SJW stockholders. For example,
in California Water's opinion:

  • If the Connecticut Water merger is completed, SJW stockholders
    would be forced to wait for uncertain benefits that, by SJW's own
    admission, would not fully accrue until the long term,
    bearing the substantial execution risks associated with operating two
    separate systems located 3,000 miles apart in different regulatory
    environments. In contrast, California Water's proposed transaction
    offers substantial and certain value to SJW stockholders.
  • SJW would be led by a Board and CEO who are largely unfamiliar with
    the San Jose community and the unique challenges of running a
    California-based water utility.
    Six out of 12 directors for the
    new SJW/Connecticut Water Board would come from Connecticut Water –
    five are current Connecticut Water directors and the sixth is SJW's
    brand new Chairman and CEO, Eric Thornburg, who ran Connecticut Water
    for more than 11 years, until late last year.
  • The completion of the Connecticut Water transaction is uncertain
    given Eversource Energy's pending bid for Connecticut Water and the
    need for a 2/3 vote of Connecticut Water shareholders.
  • The SJW/Connecticut Water transaction faces regulatory approval in
    the same number of jurisdictions as the California Water proposal.
    has cited regulatory approval as a reason for rejecting the California
    Water proposal; however, it then acknowledges the Connecticut Water
    transaction also requires regulatory approval in two different states
    – Connecticut and Maine. Regulators in these states have no existing
    relationships with SJW and may well have concerns approving a
    transaction in which the acquiring company is located in California
    3,000 miles away.

In its preliminary proxy materials, California Water urges SJW
stockholders to vote against the Connecticut Water merger by:

  • Voting "AGAINST" the proposal to approve the issuance of shares of SJW
    common stock to Connecticut Water shareholders pursuant to the merger;
  • Voting "AGAINST" the proposal to adopt the SJW certificate of
    incorporation amendment; and
  • Voting "AGAINST" the proposal to approve any motion to adjourn the SJW
    special meeting.

California Water remains fully committed to its proposed combination
with SJW, with the goal of working collaboratively with SJW to reach an

Morgan Stanley is serving as financial advisor to California Water and
Gibson Dunn is serving as its legal advisor.

About California Water Service Group

California Water Service Group is the parent company of California Water
Service, Washington Water Service, New Mexico Water Service, Hawaii
Water Service, CWS Utility Services, and HWS Utility Services. Together,
these companies provide regulated and non-regulated water service to
approximately 2 million people in more than 100 California, Washington,
New Mexico, and Hawaii communities. California Water Service Group's
common stock trades on the New York Stock Exchange under the symbol
"CWT." Additional information is available online at

Forward-Looking Statements

This news release contains forward-looking statements within the meaning
established by the Private Securities Litigation Reform Act of 1995
("Act"). The forward-looking statements are intended to qualify under
provisions of the federal securities laws for "safe harbor" treatment
established by the Act. Forward-looking statements are based on
currently available information, expectations, estimates, assumptions
and projections, and management's judgment about the Company, the water
utility industry and general economic conditions. Such words as would,
expects, intends, plans, believes, estimates, assumes, anticipates,
projects, predicts, forecasts or variations of such words or similar
expressions are intended to identify forward-looking statements. The
forward-looking statements are not guarantees of future performance.
They are subject to uncertainty and changes in circumstances. Actual
results may vary materially from what is contained in a forward-looking
statement. Factors that may cause a result different than expected or
anticipated include, but are not limited to: the failure to consummate
the proposed transaction with SJW upon the terms set forth in California
Water's proposal; governmental and regulatory commissions' decisions;
changes in regulatory commissions' policies and procedures; the
timeliness of regulatory commissions' actions concerning rate relief;
changes in environmental compliance and water quality requirements;
electric power interruptions; changes in customer water use patterns and
the effects of conservation; the impact of weather and climate on water
availability, water sales and operating results; civil disturbances or
terrorist threats or acts, or apprehension about the possible future
occurrences of acts of this type; labor relations matters as we
negotiate with the unions; restrictive covenants in or changes to the
credit ratings on our current or future debt that could increase our
financing costs or affect our ability to borrow, make payments on debt
or pay dividends; and, other risks and unforeseen events. When
considering forward-looking statements, you should keep in mind the
cautionary statements included in this paragraph, as well as our annual
10-K, Quarterly 10-Q, and other reports filed from time-to-time with the
Securities and Exchange Commission. California Water assumes no
obligation to provide public updates of forward-looking statements
except to the extent required by law.

Important Additional Information

On May 2, 2018, California Water filed a preliminary proxy statement
with the Securities and Exchange Commission (the "Preliminary Proxy
Statement") to solicit proxies in opposition to resolutions related to
the pending merger between SJW Group and Connecticut Water Service, Inc.
filed, would be available free of charge at the Securities and Exchange
Commission's website (
or by directing a request to Innisfree M&A Incorporated at (888)
750-5834 (banks and brokers call collect at (212) 750-5833).

Participants in the Solicitation

California Water, its directors and certain of its officers and
employees may be deemed to be participants in any solicitation of SJW
Group stockholders in connection with the proposed transaction between
California Water and SJW Group. Information about such participants, and
a description of their direct or indirect interests, by security
holdings or otherwise, is included in the Preliminary Proxy Statement.

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