DOW JONES NEWSWIRES
Pennichuck Corp. (PNNW) has agreed to be acquired by the city of
Nashua, N.H., for about $138 million, settling a longstanding
eminent-domain dispute involving attempts by the city to acquire
all or a significant portion of the business that runs Nashua's
water system.
The city undertook a years-long effort to seize Pennichuck by
eminent domain before state regulators approved the effort in 2008.
But the price tag the New Hampshire Public Utilities Commission set
for a deal to be completed--$243 million--was too much for Nashua
officials, so a deal was never cinched.
Still, a two-thirds vote in support of the deal announced
Friday, valued at nearly $200 million including debt assumption, is
needed by Nashua's Board of Alderman for the agreement to go into
effect.
Pennichuck shareholders would get $29 a share, a 19% premium to
Thursday's closing price and an all-time high for the stock.
President and Chief Executive Duane C. Montopoli said while
regulators got the company's valuation right in 2008, "this stock
sale will enable our shareholders to avoid double-taxation and the
city will acquire more assets at a lower total cost than would
apply in a condemnation taking. Consequently, this is a true
win-win outcome for both the company's shareholders and the
citizens of Nashua."
Pennichuck, which has called itself New Hampshire's oldest
continuously operating business, has reported improved earnings on
higher revenue in recent quarters.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com