8-K: Current report filing

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934

Date of Report (Date of earliest event reported): March 23, 1999

CALIFORNIA WATER SERVICE GROUP
(Exact name of registrant as specified in its charter)



California 1-13883 77-0448994
State of Incorporation Commission File No. IRS Employer ID Number

1720 North First Street, San Jose, CA 95112
Address, including Zip code, of registrant's principal executive office

(408) 367-8200
Registrant's telephone number, including area code

California Water Service Company
(Former name or former address, if changed since last report)

Item 5. Other Events

On March 22, 1999, Registrant issued a press release announcing
that Registrant and its wholly-owned subsidiary, California Water
Service Company, and Dominguez Services Corporation ("Dominguez")
had amended their previously announced merger agreement. The merger
agreement was signed on November 11, 1998. Subsequently, an
unsolicited competing proposal was received by Dominguez. On March
16, 1999, Dominguez notified Registrant that the competing proposal
was determined to be superior to the Registrant's proposal.
Registrant amended its proposal which was accepted by the Dominguez
board at their March 22, 1999 meeting.
As set forth in the press release, the merger with Dominguez,
except as amended, will move forward under the agreed terms and
conditions. The amendment provides that each issued and outstanding
share of Dominguez common stock will be exchanged for between 1.25
and 1.49 shares of Registrant's common stock. The exchange ratio
will vary within the established collar with the value of
Registrant's common stock market value.
The consummation of the merger is conditioned upon the
satisfaction of certain conditions, including approval by the
California Public Utilities Commission and other regulatory
approvals, receipt of certain assurances that the Merger will be
accounted for as a pooling-of-interests and will qualify as a tax
free reorganization, and approval by Dominguez' shareholders.


Item 7. Financial Statements and Exhibits

Press release issued by the Registrant on March 22, 1999.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this current report to be signed
on its behalf by the undersigned hereunto duly authorized

Date: March 23, 1999 California Water Service Group

By: /s/ PETER C. NELSON
Peter C. Nelson
President and Chief Executive Officer

Exhibit Index

Sequential
Page
Number
Exhibit No.

1. Press release issued by the Registrant on March 22, 1999. 5



This news release includes the logo of California Water Service Group.

CALIFORNIA WATER SERVICE GROUP AND
DOMINGUEZ SERVICES CORPORATION AMEND MERGER AGREEMENT


SAN JOSE, CA - At special meetings held on Monday, March 22, the
Boards of Directors of California Water Service Group (NYSE: CWT) and
Dominguez Services Corporation (NASDAQ: DOMZ) announced an amendment
to their November 13, 1998 merger agreement. The amendment was in
response to an unsolicited, competing proposal that the Dominguez
Board determined provided more favorable terms to its shareholders
than the definitive merger agreement with Cal Water previously
announced.
"We are pleased to reaffirm our commitment to completing a
friendly, strategic merger with one of the finest companies in the
investor-owned water industry," said Robert W. Foy, Chairman of the
Board of California Water Service Group. "This transaction is still
expected to be accretive to Group shareholders within the first
calendar year of operating Dominguez."
Peter C. Nelson, Group's President and Chief Executive Officer,
said that the merger "will add shareholder value in a number of
ways, including: providing growth opportunities in new areas of
California; allowing the consolidation of two neighboring systems in
the Los Angeles region; capitalizing on the unique complimentary
strengths of each company; and permitting us to reap the
administrative benefits of a combined company. Shareholders will
benefit further from the added liquidity resulting from Group's
trading on the New York Stock Exchange with a larger number of shares
outstanding of the combined companies." He also noted that
employees of the combined companies will have enhanced employment
opportunities and that customers will benefit from expanded
resources.
The revised transaction will be accounted for as a pooling of
interests. It will be structured as a tax-free, stock-for-stock
merger. Each share of Dominguez would be converted into the right to
receive between 1.25 and 1.49 shares of Cal Water common stock,
depending upon the average price of Cal Water common stock for a
twenty day period preceding the closing of the transaction. The
conversion ratio is designed to give Dominguez shareholders the
number of Cal Water shares which yield the equivalent of $33.75 per
Dominguez share, providing the average price of Cal Water common
stock does not fall below $22.65 or exceed $27.00. If the average
price falls outside this range (the collar) the equivalent amount per
share received by Dominguez shareholders would be higher or lower
than $33.75. Group will also assume Dominguez outstanding net debt
of approximately $10.5 million, for a combined merger transaction
value of approximately $63.5 million.
The transaction is believed to be the largest merger of
investor-owned water utilities in the history of California.
The merger remains subject to review by various state and
federal agencies, including the United States Securities and Exchange
Commission and the California Public Utilities Commission. Final
regulatory approval is expected in late 1999. Dominguez shareholders
must also approve the transaction, which is expected to occur during
May 1999.
This press release contains forward looking statements relative
to the merger and its impact on future operating results. These
statements are intended to qualify for the "safe harbor" provisions
established by the Private Securities Litigation Reform Act of 1995.
The statements are based on currently available information,
estimates, projections, and management's judgement. Actual results
may differ materially from anticipated results due to various factors
including regulatory commission decisions and timing, operating
revenues realized, cost synergies gained from integrating the two
companies' operations, stock market values and general economic
conditions.
California Water Service Group is the parent company of
California Water Service Company and CWS Utility Services.
California Water Service Company is the largest investor owned water
utility in California and the fourth largest in the country. It was
formed in 1926 and provides high-quality water service to 1.5 million
people in 59 California communities. CWS Utility Services provides
nonregulated water related services.
Dominguez Service Corporation owns and operates Dominguez Water
Company ("DSC"), a regulated public utility formed in 1911. DSC
provides water service to almost 40,000 customers primarily in the
South Bay area of Los Angeles County. Through its subsidiaries, DSC
also has operations in the Antelope Valley in northern Los Angeles
County, the Kern River Valley near Lake Isabella in Kern County and
in the Russian River area of northern California. Dominguez also has
a water rights trading business.
Additional information about the two companies may be found on
the attached fact sheet or on their Web sites, located at
www.calwater.com and www.dominguezh2o.com.