Pennichuck dismisses valuations in Gabelli research report

By Susanna Moon

Chicago, Oct. 10 - Pennichuck Corp. said it opposed some valuations in a report by Gabelli & Co., Inc. concerning New Hampshire Public Utilities Commission's ruling in the eminent domain dispute with the city of Nashua, N.H.

The commission ruled Nashua could purchase the Pennichuck Water Works, Inc. regulated utility subsidiary for $203 million.

In the report, Gabelli sets the value of Pennichuck Water Works at $243 million, or $57 per share, which includes a $40 million reserve fund to mitigate increased expenses at the two other regulated utilities owned by Pennichuck Corp.

The Gabelli report also said its valuation from a shareholder's perspective is $31.04 per share.

The company said it disagreed with the valuations and it does not endorse or adopt any statements in the Sept. 3 research report

"We look forward to the possibility of engaging in further comprehensive settlement discussions with the city of Nashua aimed at resolving our dispute outside of eminent domain," Duane C. Montopoli, Pennichuck's president and chief executive officer, said in a press release.

"Nevertheless, I must caution Pennichuck stakeholders that should such discussions occur in the future, a comprehensive settlement would require the negotiation and resolution of many complex issues, and therefore, there can be no assurance that Nashua and Pennichuck would ultimately be able to reach a settlement agreement," Montopoli continued.

"Moreover, in addition to the approval of two-thirds of Nashua's Board of Aldermen, a definitive settlement agreement could also be subject to approval by the NHPUC and, depending on the terms of any settlement, Pennichuck shareholders."

The company said it does not intend to comment further on the status or substance of settlement discussions until it enters into a definitive settlement agreement.

Based on schedule 13D filings with the Securities and Exchange Commission, Gabelli beneficially owns 14% of Pennichuck's outstanding common shares.

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