July 13 (Reuters) - Connecticut Water Service Inc rejected a revised takeover offer from Eversource Energy, according to regulatory filings from both companies on Friday, insisting it would consider abandoning its planned merger with another utility only for a much higher offer.
The episode is the latest in a contentious four-way water utility merger battle that emerged after Connecticut Water and SJW Group announced in March they planned to combine, with California Water Service Group also involved.
Clinton-based Connecticut Water, which turned down a previous takeover proposal from Eversource Energy, said it had received a $64 per share offer on July 2, but its board unanimously rejected this as it was “inadequate and still undervalues” the company, given it was worth less than 1 percent more than the dismissed April deal.
In its filing, Eversource said the latest rejected offer also included raising the per-share price to $66, should Connecticut Water not have to pay any break-up fee relating to its SJW tie-up, as well as a higher payout should it fail to complete the acquisition within a certain timeframe.
Explaining its position, Connecticut Water said its merger with SJW continued to offer superior shareholder value going forward, but an offer from Eversource worth in excess of $69.50 per share would represent “reasonable” value for the business.
At 2:35 p.m. ET, Connecticut Water’s share price was 0.9 percent higher at $65.94.
Disclosure of the revised offer from Eversource comes as a 45-day period where Connecticut Water agreed to solicit other potential deals to its planned SJW merger is about to end this weekend.
It is also a day after SJW said the planned merger was still on course to complete in the fourth quarter of 2018, after the California Public Utilities Commission said it would study whether it needed to review the transaction.
The tie-up between SJW and Connecticut Water proposes creating the third-largest investor-owned water and wastewater utility in the United States, with an equity value of around $1.9 billion, serving 1.5 million customers.
As well as Eversource’s pursuit of Connecticut Water, California Water is seeking to combine with SJW. After SJW rejected a merger offer from California Water in April, California launched a tender offer in June to acquire SJW shares. (Reporting by David French Editing by Frances Kerry)