We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Connecticut Water Loyal to SJW Group, Rejects Eversource Bid
Read MoreHide Full Article
Connecticut Water Service announced that it has received a proposal from Eversource Energy (ES - Free Report) for acquisition. The offer was for $63.50 per share in cash and/or in Eversource common shares, however, Connecticut Water has rejected the offer. Connecticut Water remained committed to the earlier offer made by SJW Group (SJW - Free Report) for merger (Read More: Connecticut Water Service to Merge With SJW Group)
Why Connecticut Water Rejected the Offer?
Connecticut Water remained committed to the earlier offer made by SJW Group, citing that it will be a merger of equals, and offer better opportunity for growth and return to shareholders. In the last five years, Connecticut Water has delivered 154% total return to the company's shareholders, while SJW Group returned 145% to its shareholders; both much higher compared with Eversource Energy’s return of 57% in the same time frame.
The combined company will maintain a strong "A" credit profile and is expected to pursue a share repurchase program of up to $100 million, increasing the shareholders’ value. The financial flexibility of the combined company will allow it to carry on with infrastructure upgrades, replacement of old mains and pipelines, and provide high-quality services to its customers.
In addition, the merger will be accretive to earnings of each company, and there will be ample financial flexibility to expand operation and compete with water utility operators in the fragmented industry.
Why Eversource Made the Offer?
Eversource Energy is an energy company and has now started to venture in the water utility space through the acquisition of Aquarion Water Company. The fragmented water utility space offers growth opportunity from the current levels.
Aquarion Water Company’s service territory is in close proximity to Connecticut Water’s service territory, so the acquisition of the latter would have expanded the service territory in the Northeast and provided superior services to the customers.
Bigger Picture
Consolidation is the need of the hour in the fragmented U.S. water utility space. The water utility infrastructure in the United States is getting old and needs ample investments, easier for bigger players to make. Consolidation would therefore drive the necessary infrastructure overhauls that have become imperative for the industry at large.
Another water utility, American Water Works Company (AWK - Free Report) is very active and keeps on making strategic acquisitions to expand its footprint. In 2017, the company added 39,514 customers via acquisitions. American Water Works is in discussions to acquire another 23,000 customers through acquisitions.
Price Movement
Year to date, Connecticut Water has returned 13% against its industry's decline of 7.4%.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Connecticut Water Loyal to SJW Group, Rejects Eversource Bid
Connecticut Water Service announced that it has received a proposal from Eversource Energy (ES - Free Report) for acquisition. The offer was for $63.50 per share in cash and/or in Eversource common shares, however, Connecticut Water has rejected the offer. Connecticut Water remained committed to the earlier offer made by SJW Group (SJW - Free Report) for merger (Read More: Connecticut Water Service to Merge With SJW Group)
Why Connecticut Water Rejected the Offer?
Connecticut Water remained committed to the earlier offer made by SJW Group, citing that it will be a merger of equals, and offer better opportunity for growth and return to shareholders. In the last five years, Connecticut Water has delivered 154% total return to the company's shareholders, while SJW Group returned 145% to its shareholders; both much higher compared with Eversource Energy’s return of 57% in the same time frame.
The combined company will maintain a strong "A" credit profile and is expected to pursue a share repurchase program of up to $100 million, increasing the shareholders’ value. The financial flexibility of the combined company will allow it to carry on with infrastructure upgrades, replacement of old mains and pipelines, and provide high-quality services to its customers.
In addition, the merger will be accretive to earnings of each company, and there will be ample financial flexibility to expand operation and compete with water utility operators in the fragmented industry.
Why Eversource Made the Offer?
Eversource Energy is an energy company and has now started to venture in the water utility space through the acquisition of Aquarion Water Company. The fragmented water utility space offers growth opportunity from the current levels.
Aquarion Water Company’s service territory is in close proximity to Connecticut Water’s service territory, so the acquisition of the latter would have expanded the service territory in the Northeast and provided superior services to the customers.
Bigger Picture
Consolidation is the need of the hour in the fragmented U.S. water utility space. The water utility infrastructure in the United States is getting old and needs ample investments, easier for bigger players to make. Consolidation would therefore drive the necessary infrastructure overhauls that have become imperative for the industry at large.
Another water utility, American Water Works Company (AWK - Free Report) is very active and keeps on making strategic acquisitions to expand its footprint. In 2017, the company added 39,514 customers via acquisitions. American Water Works is in discussions to acquire another 23,000 customers through acquisitions.
Price Movement
Year to date, Connecticut Water has returned 13% against its industry's decline of 7.4%.
Zacks Rank
Connecticut Water Service has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>