Pennichuck Corporation (NASDAQ: PNNW) today announced that last
night, January 11, 2011, the Board of Aldermen of the City of
Nashua, New Hampshire ("City") approved and ratified, by more than
a two-thirds majority vote, the Merger Agreement between the City
and the Company and the issuance of bonds to finance the
acquisition. The actual vote was 14 in favor and 1 opposed.
On November 12, 2010, the Company announced that it had entered
into a definitive merger agreement ("Merger Agreement") with the
City pursuant to which the City will, subject to a number of
conditions precedent and contingencies, purchase all of the
outstanding common stock and common stock equivalents of the
Company for $29.00 per share, or approximately $138 million, in
cash. While the Merger Agreement was executed and made effective on
November 11, 2010, under New Hampshire law an affirmative vote of
not less than two-thirds of the City's Board of Aldermen within a
90-day time period set by law is required to approve and ratify the
Merger Agreement and the related financing.
As previously announced, it is the Company's contention that the
90-day period within which the affirmative two-thirds majority vote
must be obtained was not triggered prior to the November 11, 2010
effective date of the Merger Agreement. For more information on
this topic, see the Company's press releases issued on June 2, June
30 and November 12, 2010, the related Form 8-K filings with the
U.S. Securities and Exchange Commission (the "SEC"), and the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2010, also filed with the SEC.
Separate and apart from the two-thirds majority vote
requirement, consummation of the transaction is subject to advance
approval by the New Hampshire Public Utilities Commission ("NHPUC")
pursuant to New Hampshire law, including the state's utility
municipalization statute RSA 38 and special 2007 legislation
relating to the City's right to purchase and hold the Company's
common stock. The Company cannot predict how or when the NHPUC will
rule on the transaction. However, the Company believes the review
process, which is expected to include notice to interested parties,
public hearings, discovery and testimony by the City, the Company
and other interested parties, may extend into the second half of
calendar 2011. The City's obligation to complete the transaction is
subject to there being no approval conditions imposed by the NHPUC
that would materially adversely affect the City's expected economic
benefits from the transaction.
Closing of this transaction is also subject to (i) approval by
the holders of not less than two-thirds of the outstanding shares
of the Company's common stock, and (ii) Nashua's ability to obtain
appropriate financing after all conditions precedent (including
those specified above and other customary closing conditions) have
been met.
While the Company and the City remain committed to completing
this transaction as quickly as possible, it is not possible to
predict whether all the approvals, contingencies and other
conditions precedent to closing will be obtained, resolved or
satisfied, as applicable, and therefore if and when the transaction
will close.
About Pennichuck Corporation
Pennichuck Corporation is a holding company involved principally
in the supply and distribution of potable water in New Hampshire
through its three regulated water utilities. Its non-regulated,
water-related activities include operations and maintenance
contracts with municipalities and private entities in New Hampshire
and Massachusetts. The Company's real estate operations are
involved in the ownership, management and commercialization of real
estate in southern New Hampshire.
Pennichuck Corporation's common stock trades on the Nasdaq
Global Market under the symbol "PNNW." Upon completion of the
transaction, Pennichuck's common stock will cease to be publicly
traded. The Company's website is at www.pennichuck.com.
Forward-Looking Statements
This news release may contain certain forward-looking statements
with respect to the financial condition, results of operations and
business of Pennichuck Corporation. Forward-looking statements are
based on current information and expectations available to
management at the time the statements are made, and are subject to
various factors, risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements. These factors include, but are not
limited to, a future judicial or regulatory determination that
events prior to the November 11, 2010 effective date of our merger
agreement with the city of Nashua constituted a final determination
of the price to be paid under RSA 38:13 and triggered the statutory
90-day period within which Nashua was required to decide whether to
take, by eminent domain, the assets of our Pennichuck Water Works,
Inc. subsidiary; the expiration of said 90-day period without
Nashua having made any such decision; the outcome of requests for
rate relief from the NHPUC from time to time; the implications of
the New Hampshire Supreme Court's March 25, 2010 decision affirming
the eminent domain order of the NHPUC in favor of the City of
Nashua; legislation and/or regulation and accounting factors
affecting Pennichuck Corporation's financial condition and results
of operations; the availability and cost of capital, including the
impact on our borrowing costs of changes in interest rates; and,
the impact of weather. Investors are encouraged to access
Pennichuck Corporation's annual and quarterly periodic reports
filed with the Securities and Exchange Commission for financial and
business information regarding Pennichuck Corporation, including a
more detailed discussion of these and other risks and uncertainties
that could affect Pennichuck Corporation's forward-looking
statements. We undertake no obligation to update or revise publicly
any forward-looking statement.
Additional Information and Where to Find
It
Pennichuck Corporation plans to file with the U.S. Securities
and Exchange Commission and mail to its shareholders a proxy
statement in connection with the transaction (the "Proxy
Statement"). The Proxy Statement will contain important information
about Pennichuck Corporation, the proposed acquisition by the City
of Nashua and related matters. EXISTING AND PROSPECTIVE PENNICHUCK
CORPORATION SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT
REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Pennichuck Corporation security holders will be able to obtain
free copies of the Proxy Statement and other documents filed with
the SEC by Pennichuck Corporation through the web site maintained
by the SEC at www.sec.gov. In addition, documents filed by
Pennichuck Corporation with the SEC, including filings that will be
incorporated by reference in the Proxy Statement, can be obtained,
without charge, upon written request addressed to Roland E.
Olivier, Secretary, Pennichuck Corporation, 25 Manchester Street,
Merrimack, New Hampshire 03054.
Participants in the Solicitation
Pennichuck Corporation, its directors, executive officers and
other members of management, and the City of Nashua and its
officials and employees may be deemed to be participants in the
solicitation of proxies in respect of the acquisition contemplated
by the merger agreement. Information regarding Pennichuck
Corporation's directors and executive officers is contained in
Pennichuck Corporation's Annual Report on Form 10-K for the year
ended December 31, 2009, as filed with the SEC on March 4, 2010,
and its proxy statement for its 2010 annual meeting, as filed with
the SEC on March 26, 2010. Information about the City and its
officials can be found at http://www.gonashua.com. Additional
information regarding the interests of those participants may be
obtained by reading the Proxy Statement regarding the proposed
transaction when it becomes available. EXISTING AND PROSPECTIVE
SECURITY HOLDERS SHOULD READ THE PROXY STATEMENT AND OTHER
DOCUMENTS TO BE FILED WITH THE SEC CAREFULLY BEFORE MAKING AN
INVESTMENT DECISION WITH RESPECT TO PENNICHUCK CORPORATION
SECURITIES.
For More Information, Contact: Duane C. Montopoli
President and Chief Executive Officer Phone: 603-913-2300 Fax:
603-913-2305
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