California Water Service Group (NYSE:CWT) Q1 2018 Earnings Conference Call - Final Transcript
Apr 26, 2018 • 11:00 am ET
Martin A. Kropelnicki
a few moments to highlight what's included in our proposal. First, we propose to acquire SJW for $68.25 a share in all cash transaction valuing at approximately $1.9 billion including the assumption of debt.
Second, the proposal exceeds the all-time high closing price and represents the 20% premium to SJW's closing price yesterday, I'd also like to point out at the time when they written offer on April 4th and sent a letter to the SJW board that was a 30% premium on the closing stock price. Our offer provides significant, immediate and certain value for the stockholders that far exceeds which could be received under the pending all stock merger with Connecticut water.
In addition, our proposal not subject to any financing contingencies and we are confident that where we can move forward to conduct due diligence into definitive agreement quickly. SJW is the superb strategic and operational fit with Cal Water. Together we will create a stronger larger California based water utility. We believe this is it would be seamless acquisition that would integrate quickly into our operations with little to no integration risk.
Because we know SJW extremely well and their number there literally about a mile down the street from us. Our joining service territory enables us to officially bring these companies together to create one operating system within the State of California.
The combined company would have a stronger financial position benefit from our greater scale, and overall make us a stronger utility within the State of California. Our proposals offer substantial benefits to our customers, employees and communities that we serve.
I will talk about these in greater detail in just a minute. If I can get everyone to turn to page four I want to talk about why we are bringing our proposal directly to SJW stockholders. First, we've had a very good and long-standing relationship and admired San Jose Water Corporation.
We had numerous attempts over the years in discussions to constructively try to bring the two companies together and fortunately each time we've had this, we've never been able to bring it to be a meaningful conclusion.
This includes our efforts from September of 2017 last year while we made a formal private proposal to their board at a substantial premium 25% to 30% that was rejected outright without further discussion. It's also noteworthy that our offer in September was four of cash stock or a combination there of to accommodate their stockholders.
Approximately six weeks ago San Jose Water announced that they entered into a definitive agreement to merge with Connecticut Water and did so without talking to us. Since then we privately reached out them several times to discuss our superior proposal, but they simply refused to engage. In fact, we were surprised to learn that SJW's board rejected our proposal of April 13 but waited until yesterday to inform us.
SJW's actions have prevented their stockholders learning about the substantial and immediate value that we can deliver. In