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SJW Group Rejects California Water Service Group's Revised Proposal

SJW Group (SJW) said that its Board rejected the revised proposal announced on August 13, 2018, by California Water Service Group (CWT) or "Cal Water" to acquire all outstanding shares of SJW Group common stock for $70.00 per share in cash, a 2.6% increase or a 1.9% increase on an enterprise value basis from Cal Water's previous offer of $68.25 per share.

The SJW Group Board concluded that Cal Water's revised proposal neither constitutes nor is reasonably likely to lead to a superior proposal under the terms of SJW Group's amended merger agreement with Connecticut Water Service, Inc. (CTWS), which was announced on August 6, 2018. In addition, the SJW Group Board reaffirmed its recommendation that SJW Group stockholders NOT tender their shares into Cal Water's current tender offer.

The Board also reaffirmed its support of the transaction through which SJW Group will acquire all outstanding shares of Connecticut Water for $70.00 per share in cash. As previously announced, the transaction with Connecticut Water has - to date - received express support from SJW Group stockholders representing more than 31% of SJW Group shares outstanding and is expected to close in the first quarter of 2019.

SJW Group Chairman, President and Chief Executive Officer Eric Thornburg abstained from voting on Cal Water's revised proposal due to his ownership of Connecticut Water shares and the all-cash nature of the combination with Connecticut Water.

The SJW Group Board determined that the proposal undervalues SJW Group and limits the value potential for SJW Group stockholders. Cal Water's revised proposal of $70.00 per share, even without accounting for any capital gains tax consequence, represents only a nominal one percent increase to SJW Group's all-time high stock price of $69.29, which was achieved on a standalone basis less than nine months ago on November 30, 2017, and only a 12.2% increase to SJW Group's closing stock price on August 13, 2018, the last trading day prior to Cal Water publicly announcing its revised proposal.

The SJW Group Board believes that a combination with Connecticut Water is the best value-creation path forward for SJW Group stockholders.

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