Aquarion and Kelda Respond To Concerns About Land Preservation.

BRIDGEPORT, Conn.--(BUSINESS WIRE)--Nov. 22, 1999--

Kelda Group plc CEO Dr. Kevin Bond said today that he hopes to meet with a group of government officials to discuss their concerns about Aquarion's watershed land that have been raised as a result of its proposed merger with Kelda.

In a statement issued today Bond said: "Kelda's mission as a water supplier is to balance the needs of the business with the needs of the environment and the communities in which it operates. We are amongst the most efficient operators in the world of water systems. Community care and environmental stewardship are two of the pillars that form the foundations of our business.

"The attempted late intervention in the Department of Public Utility Control (DPUC) proceeding by a group of elected officials and the Connecticut Fund for the Environment seeking to delay the approval of Kelda's acquisition of Aquarion is a surprise to us. The existing state controls on the sale of water company land are strict, requiring consideration and approval by both the DPUC and the Connecticut Department of Public Health," Bond commented.

"My company has always worked in partnership with legislative and regulatory authorities," Bond said. "If this group is concerned about land use and preservation, I am happy to meet with them to discuss how best to protect the community interests and the environment," he commented. Bond indicated he hoped to meet with representatives of the group soon.

"If this action is based upon a misunderstanding of Aquarion's and Kelda's intent regarding land sales, we are certainly available to meet and discuss our policies and intentions," said Aquarion President and CEO Richard K. Schmidt.

Schmidt noted that the merger would benefit all of the company's stakeholders. "Our customers will benefit from improvements to BHC Company's water and customer service; shareholders will receive a premium for their shares of Aquarion stock; and employees will have more career opportunities with a company that operates water and wastewater treatment facilities internationally."

"This transaction will provide BHC and its customers access to state-of-the-art technology, which will enable BHC to benefit from enhanced infrastructure renewal, more advanced customer service and access to research and development. In addition, Kelda has a shared commitment with BHC and Aquarion to continue their community involvement and environmental stewardship," said Bond.

On June 1, 1999, Aquarion and Kelda Group plc announced they had reached an agreement whereby Kelda would acquire all of the outstanding shares of Aquarion for $37.05 per share in cash. As a result, Aquarion would be merged with a subsidiary of Kelda, but would maintain its identity. On September 22, 1999, Aquarion shareholders approved the merger and on November 4, the DPUC issued a draft decision approving the transaction. The DPUC is scheduled to issue its final decision on December 1, 1999.

Aquarion Company's principal business is public water supply. Through its BHC and Sea Cliff Water Company subsidiaries, it is one of the 10 largest investor-owned water utilities in the U.S. and serves 141,000 customers, or a population of more than 500,000, in 30 Connecticut and Long Island, NY communities.

Kelda Group plc has annual revenues of $1.1 billion and operates in the United Kingdom and Europe with approximately 4500 employees. Its water and sewerage services businesses, Yorkshire Water Services, provide drinking water to approximately 1.9 million customers, or a population of 4.5 million, in the county of Yorkshire, England. Yorkshire Water Services supplies its customers with 350 million of gallons of water daily, treated at 112 water treatment facilities.