Market Overview

SJW Group Board of Directors Rejects California Water Service Group's Revised Proposal


Reaffirms Support for Superior, Value-Accretive Combination with
Connecticut Water

Combination with Connecticut Water Provides Substantially Greater
Benefits for Customers, All Employees and Local Service Area Communities

SJW Stockholders Advised Not to Tender Their Shares to Cal Water

SJW Group (NYSE:SJW) today announced that its Board of Directors
rejected the revised proposal announced on August 13, 2018, by
California Water Service Group (NYSE:CWT) ("Cal Water") to acquire all
outstanding shares of SJW Group common stock for $70.00 per share in
cash, a 2.6% increase (or a 1.9% increase on an enterprise value basis)
from Cal Water's previous offer of $68.25 per share.

The SJW Group Board concluded, in consultation with external legal and
financial advisors, that Cal Water's revised proposal neither
constitutes nor is reasonably likely to lead to a superior proposal
under the terms of SJW Group's amended merger agreement with Connecticut
Water Service, Inc. (NASDAQ:CTWS) ("Connecticut Water"), which was
announced on August 6, 2018. In addition, the SJW Group Board reaffirmed
its recommendation that SJW Group stockholders NOT tender their shares
into Cal Water's current tender offer.

The Board also reaffirmed its support of the transaction through which
SJW Group will acquire all outstanding shares of Connecticut Water for
$70.00 per share in cash. As previously announced, the transaction with
Connecticut Water has – to date – received express support from SJW
Group stockholders representing more than 31% of SJW Group shares
outstanding and is expected to close in the first quarter of 2019. SJW
Group Chairman, President and Chief Executive Officer Eric Thornburg
abstained from voting on Cal Water's revised proposal due to his
ownership of Connecticut Water shares and the all-cash nature of the
combination with Connecticut Water.

"All of us on the Board of SJW Group take our fiduciary responsibilities
to stockholders seriously and, after a deliberate and thorough review,
we have concluded that Cal Water's revised proposal is neither the most
compelling nor the most certain path forward for our stockholders, or
for our customers, employees and the communities we serve," said Robert
A. Van Valer, the lead independent director of SJW Group's Board of
Directors and trustee of the Roscoe Moss Jr. Revocable Trust, which is
the largest stockholder of the Company. "We remain confident that SJW
Group will create more value for our stockholders and deliver greater
benefits to all of our stakeholders by proceeding with the immediately
and increasingly accretive combination with Connecticut Water."

In reaching its decision to reject Cal Water's revised proposal, the SJW
Group Board determined that the proposal undervalues SJW Group and
limits the value potential for SJW Group stockholders. Cal Water's
revised proposal of $70.00 per share, even without accounting for any
capital gains tax consequence, represents only a nominal one percent
increase to SJW Group's all-time high stock price of $69.29, which was
achieved on a standalone basis less than nine months ago on November 30,
2017, and only a 12.2% increase to SJW Group's closing stock price on
August 13, 2018, the last trading day prior to Cal Water publicly
announcing its revised proposal.

Furthermore, the SJW Group Board concluded that moving forward with Cal
Water's revised proposal would not permit SJW Group stockholders to
share in the benefits that it believes will come from the combination
with Connecticut Water, including the opportunity to realize the
long-term benefits of increased scale, enhanced financial strength and
geographic diversity; the expected continued payment of robust dividends
over time; the anticipated higher future growth profile; and significant
immediate and increasing earnings accretion. As a result, the SJW Group
Board believes that a combination with Connecticut Water is the best
value-creation path forward for SJW Group stockholders.

In carrying out its fiduciary duty to consider the offer, the SJW Group
Board also considered the likely timeframe for closing of a transaction
with Cal Water. In this regard, the Board took into account that Cal
Water's revised proposal would be subject to regulatory review by the
California Public Utilities Commission, which could take up to 18
months, a period which has not yet commenced. The Connecticut Water
combination, on the other hand, is anticipated to close by the first
quarter of 2019, at which point SJW Group stockholders are expected to
immediately start benefiting from earnings accretion.

Mr. Van Valer continued, "Not much has changed in the terms of Cal
Water's revised proposal, other than a nominal percentage bump in price
from its previous proposal of $68.25 per share, and the addition of
conditional and uncertain promises to ‘consider' addressing a few of our
concerns with the previous proposal. Accordingly, our Board remains
committed to the more certain and value-creating combination with
Connecticut Water."

Compelling Financial and Strategic Benefits of
Combination with Connecticut Water

The SJW Group Board continues to believe that SJW Group, as a standalone
company executing on its growth and capital expenditure plans, will
deliver greater long-term value to its stockholders, even more so in
light of the amended merger agreement with Connecticut Water. The Board
believes that SJW Group's combination with Connecticut Water will
deliver significant immediate value to SJW Group's stockholders, while
preserving the upside value in the future of the company. In particular,
the transaction with Connecticut Water would result in:

  • The formation of a leading, pure-play and geographically diverse
    water company
    , which on a pro-forma basis will be the
    third-largest investor-owned water and wastewater utility in the
    United States based on enterprise value and rate base, and, the Board
    believes, will have very attractive growth opportunities in the years
    to come and remain in a position to provide opportunities to employees
    and deliver safe and reliable water to customers.
  • Highly attractive, stable and increased earnings growth
    . The combined company is expected to have operating
    revenue of approximately $496 million and recurring net income of
    approximately $74 million on a 2017 pro forma basis.
  • Immediate EPS accretion for SJW Group shareholders in 2019
    (post-close), increasing each year thereafter to high single digit
    percentage EPS accretion in 2021.
  • A robust balance sheet that enhances financial flexibility to
    increase sustained growth in SJW Group's rate base
    , continue
    necessary investments in its water systems and employees and
    create a stronger, more stable utility enterprise with greater
    diversification and continued strong operating cash flow and dividends.
  • Continued dividend growth with a financing mix intended to
    maintain a strong investment grade credit rating of at least "A-" for
    the combined company. SJW Group anticipates that it will be able to
    continue its robust dividend payment trajectory.
  • Low integration risk with an experienced management team that
    has over 187 years of combined experience in water utilities,
    significant expertise in each market the combined company will operate
    in and a proven track record of integrating numerous smaller

SJW Group's Board also contends that a combination with Connecticut
Water would better position SJW Group to honor its commitments to
customers, employees and the local communities which are at the core of
its brand and mission of delivering life-sustaining, high-quality water

  • Serving local communities with a passionate, dedicated team of
    locally-based water professionals.
    Each of the combined company's
    operating utilities and their customers will continue to be supported
    locally by a team of passionate, dedicated employees and existing
    leaders. They will bring their extensive certifications, operating
    experience and local knowledge to the communities they serve.
  • Delivering customer benefits. The new organization will
    maintain the longstanding commitments of SJW Group and Connecticut
    Water to outstanding customer service, which will be enhanced by
    sharing of best practices, operational expertise and more extensive
    resources. There will be no change in customer rates as a result of
    the transaction, and the operating subsidiaries of the combined
    company will each continue to be subject to oversight by their
    respective state regulatory commissions for rates and quality of
  • Honoring commitments to employees. Following the close of the
    transaction, employees will have additional opportunities for career
    development and geographic mobility as part of a larger, stronger,
    more diverse organization. Importantly, the combined company has
    committed that there will be no layoffs as a result of the transaction
    and does not anticipate any significant changes in employee
    compensation or benefits packages. SJW Group values its trusted union
    partnerships, and all union contracts will continue to be honored.
  • Maintaining environmental stewardship. Environmental
    stewardship is a core value for both organizations, given the local
    nature of the water business. Both companies have been industry
    leaders in their efforts to promote water conservation and protect the
    valuable lands and water resources that have been entrusted to them.
    That focus will continue as the combined company seeks to further
    reduce its environmental footprint and look for opportunities to
    improve the sustainability of its business practices.
  • Ongoing support of communities. In addition to retaining
    dedicated employee teams across its footprint, the new company will
    maintain strong community ties and participation in community events
    and organizations. The combined company will continue to focus on
    supporting economic development with investments in growth, safety and

SJW Group Board Advises Stockholders NOT to
Tender Shares

As noted above, the SJW Group Board continues to recommend that SJW
Group stockholders NOT tender their shares to Cal Water's current tender
offer. The reasons for the SJW Group Board's recommendation to reject
Cal Water's current tender offer are set forth in more detail in a
solicitation/recommendation statement on Schedule 14D-9, as amended,
which has been filed with the Securities and Exchange Commission ("SEC")
and disseminated to stockholders. Copies of the Schedule 14D-9 and
solicitation/recommendation statement are available on the SEC's website
and on SJW Group's website at
Stockholders may also request additional copies of the Schedule 14D-9 by
contacting SJW Group's information agent, Georgeson, toll-free at (866)
357-4029 or by e-mail at

J.P. Morgan Securities LLC is serving as financial advisor to SJW Group,
and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel.

About SJW Group

SJW Group is a publicly traded holding company headquartered in San
Jose, California. SJW Group is the parent company of San Jose Water,
SJWTX, Inc. and SJW Land Company. Together, San Jose Water and SJWTX,
Inc. provide water service to more than one million people in San Jose,
California and nearby communities and in Canyon Lake, Texas and the
nearby communities. SJW Land Company owns and operates commercial real
estate investments.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, as amended. Some
of these forward-looking statements can be identified by the use of
forward-looking words such as "believes," "expects," "may," "will,"
"should," "seeks," "approximately," "intends," "plans," "estimates,"
"projects," "strategy," or "anticipates," or the negative of those words
or other comparable terminology.

The accuracy of such statements is subject to a number of risks,
uncertainties and assumptions including, but not limited to, the
following factors: (1) the risk that the conditions to the closing of
the proposed transaction between SJW Group and Connecticut Water may not
be satisfied or waived, including the risk that required approvals from
the security holders of Connecticut Water to the proposed transaction
are not obtained; (2) the risk that the regulatory approvals required
for the proposed transaction are not obtained, or that in order to
obtain such regulatory approvals, conditions are imposed that adversely
affect the anticipated benefits from the proposed transaction or cause
the parties to abandon the proposed transaction; (3) the effect of
water, utility, environmental and other governmental policies and
regulations; (4) litigation relating to the proposed transaction; (5)
uncertainties as to the timing of the consummation of the proposed
transaction and the ability of each party to consummate the proposed
transaction; (6) risks that the proposed transaction disrupts the
current plans and operations of SJW Group or Connecticut Water; (7) the
ability of SJW Group and Connecticut Water to retain and hire key
personnel; (8) competitive responses to the proposed transaction; (9)
unexpected costs, charges or expenses resulting from the proposed
transaction, including, without limitation, related to SJW Group's
financing plans in connection with the proposed transaction; (10)
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the proposed
transaction; (11) the combined company's ability to achieve the growth
prospects and synergies expected from the proposed transaction, as well
as delays, challenges and expenses associated with integrating SJW
Group's and Connecticut Water's existing businesses; and (12)
legislative and economic developments. These risks, as well as other
risks associated with the proposed transaction, will be more fully
discussed in the proxy statement filed by Connecticut Water in
connection with the proposed transaction, and are more fully discussed
in SJW Group's quarterly report on Form 10-Q for the period ended June
30, 2018 filed with the U.S. Securities and Exchange Commission (the
"SEC") on July 27, 2018 and Connecticut Water's quarterly report on Form
10-Q for the period ended March 31, 2018 filed with the SEC on May 9,

In addition, actual results are subject to other risks and uncertainties
that relate more broadly to SJW Group's overall business, including
those more fully described in its filings with the SEC including,
without limitation, its annual report on Form 10-K for the fiscal year
ended December 31, 2017 and Connecticut Water's overall business and
financial condition, including those more fully described in its filings
with the SEC including its annual report on Form 10-K for the fiscal
year ended December 31, 2017. Forward looking statements are not
guarantees of performance, and speak only as of the date made, and none
of SJW Group, its management, Connecticut Water or its management
undertakes any obligation to update or revise any forward-looking
statements except as required by law.


In response to the tender offer for all the outstanding shares of common
stock of SJW Group commenced by California Water Service Group
("California Water") through its wholly owned subsidiary,
Waltz Acquisition Sub, Inc., SJW Group has filed a
solicitation/recommendation statement on Schedule 14D-9 with the SEC on
June 15, 2018, as amended by that Amendment No. 1 to Schedule 14D-9
filed with the SEC on June 26, 2018 and that Amendment No. 2 to Schedule
14D-9 filed with the SEC on August 9, 2018. Investors and stockholders
of SJW Group are urged to read the solicitation/recommendation statement
on Schedule 14D-9 and other documents that are filed or will be filed
with the SEC carefully and in their entirety because they contain
important information. Investors and stockholders of SJW Group may
obtain a copy of these documents free of charge at the SEC's website at
These materials are also available free of charge at SJW Group's
investor relations website at
In addition, copies of these materials may be requested free of charge
from SJW Group's information agent, Georgeson LLC, toll-free at (866)

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