Filed by: Philadelphia Suburban Corporation
Pursuant to Rule 425 under the Securities Act of 1933, as amended
Subject Company: Pennichuck Corporation
File No.: 333-101556
FOR RELEASE: February 4, 2003
Contact: Donna Alston
Manager, Communications
610-645-1095
alstond@suburbanwater.com
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Keya Epps
Director, Investor Relations
610-645-1084
eppsk@suburbanwater.com
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PHILADELPHIA SUBURBAN AND PENNICHUCK REACH MUTUAL
TERMINATION AGREEMENT FOR PREVIOUSLY ANNOUNCED
ACQUISITION
BRYN MAWR, PA, February 4 - Philadelphia Suburban Corporation (NYSE:PSC)
announced today that it has reached a mutual termination agreement with
Pennichuck Corporation (NASDAQ:PNNW) terminating its pending acquisition of
Pennichuck, which was originally announced in April 2002.
The mutual decision to terminate the merger agreement came after the January 14,
2003 referendum of the City of Nashua, authorizing Nashua to pursue the
acquisition, by an eminent domain proceeding or otherwise, of all or a portion
of the company's water works system serving residents of Nashua and others. The
referendum passed by a vote of 6,525 to 1,867.
In light of the referendum vote, both PSC and Pennichuck have come to the same
conclusion that the decision to terminate the merger agreement was in the best
interests of both companies. PSC and Pennichuck had indicated in previous
filings with the Securities and Exchange Commission that the results of the
referendum vote could result in the termination of the proposed transaction.
"Pennichuck would have been a nice addition to the PSC system, despite the fact
that it represented less than five percent of our customer base and was only
slightly accretive," said PSC Chairman Nicholas DeBenedictis. "It would have fit
well with our New England strategy."
DeBenedictis said that while he is disappointed, it is fortunate that the
majority of costs related to the Pennichuck transaction were expensed in 2002,
and will therefore have no impact on PSC's future earnings.
DeBenedictis was very complimentary of Pennichuck CEO Maurice Arel and others
with whom he has worked since last April. "I have nothing but complete respect
for Mr. Arel, his management team and the Pennichuck employees. Pennichuck is
one of the best run and finest private water utilities in the country and would
have been a welcome addition to the PSC family of companies."
PSC continues to pursue its previously-announced acquisition of the much larger
AquaSource, Inc., which it expects to close during the second half of 2003 and
for which it has regulatory approval from six utility commissions. AquaSource
will increase the company's customer base by approximately 20 percent.
PSC is the holding company for regulated public utilities that provide water and
wastewater services to approximately two million residents in Pennsylvania,
Ohio, Illinois, New Jersey, Maine, and North Carolina. PSC's common shares are
traded on both the New York and Philadelphia Stock Exchanges under the ticker
symbol "PSC". The company has been committed to the preservation and improvement
of the environment throughout its history, which spans more than 100 years.
This press release relates to the proposed business combination of Philadelphia
Suburban Corporation and Pennichuck Corporation.
Philadelphia Suburban Corporation filed an amended registration statement on
Form S-4 with the Securities and Exchange Commission on January 13, 2003.
Investors and security holders may obtain a free copy of the registration
statement at the Commission's web site at www.sec.gov. The documents filed with
the Commission by Philadelphia Suburban Corporation may also be obtained for
free from Philadelphia Suburban Corporation by directing a request to
Philadelphia Suburban Corporation, 762 West Lancaster Avenue, Bryn Mawr,
Pennsylvania 19010, Attn: Corporate Secretary. Investors and security holders
are advised to read the registration statement referenced above because it
contains important information.
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