Chesapeake Utilities says proxy advisers urge holders to approve merger with Florida Utilities

By Susanna Moon

Chicago, Oct. 12 - Chesapeake Utilities Corp. said that independent proxy advisory firms Glass, Lewis & Co. and Proxy Governance, Inc. each recommended that Chesapeake shareholders vote in favor of the strategic merger with Florida Public Utilities Co. at Chesapeake's shareholders meeting on Oct. 22.

"We believe the proposed transaction and share issuance are in the best interests of shareholders. Accordingly, we recommend that shareholders vote for this proposal," Glass, Lewis said in its report.

"We support the deal on the basis of its strategic and synergistic benefits, which should benefit long-term shareholders," Proxy noted in its report.

Said John R. Schimkaitis, Chesapeake's president and chief executive officer, in a press release: "We are very pleased that these two independent shareholder advisory firms have determined that this transaction is in the best interests of Chesapeake's shareholders and recommended that they vote for our strategic merger with Florida Public Utilities.

"Their recommendations support our board of directors' unanimous decision that Chesapeake's merger with Florida Public Utilities enhances shareholder value and should, therefore, be supported."

Florida Public Utilities said on Oct. 9 that Glass, Lewis and Proxy also recommended that its shareholders vote in favor of the strategic merger with Chesapeake.

Chesapeake said it expected to close the merger on Oct. 29, with the merger becoming effective Nov. 1.

As previously noted, shareholders of both companies will vote on the transaction at separate special meetings on Oct. 22.

In its report, Glass, Lewis said: "The premium offered for Florida Public shares seems adequate. In addition, since the proposed transaction is a stock-for-stock deal, shareholder value realized from the acquisition depends on the future performance of the combined company. The Florida Public board believes combining with Chesapeake offers the best opportunity for the company to meet its objectives and enhance shareholder value."

The companies announced in April that they will combine in an all-stock transaction valued at roughly $74 million.

As reported, Florida shareholders will receive 0.405 of a share of Chesapeake common stock for each share of Florida they hold.

Chesapeake, a Dover, Del.-based diversified utility company, said the merger has received all required public service commission regulatory approvals.

Florida Public Utilities distributes natural gas, propane and electricity to residential, commercial and industrial customers in Florida. The company is based in West Palm Beach, Fla.

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