* Deal valued at $138 mln * Offer of $29/shr at a 19-pct premium * Shares up as much as 16 pct Nov 12 (Reuters) - Potable water supplier Pennichuck Corp agreed to be bought by the city of Nashua for about $138 million in cash, ending a protracted dispute with the New Hampshire city, sending the company's shares to a nearly three-year high. The city of Nashua will buy the company's shares at $29 each, a 19 percent premium to Pennichuck's Thursday close. The city has been trying to take over Pennichuck citing eminent domain law under which governments can seize private property for public purpose after paying compensation. "The company and the city intend that this transaction be in full settlement of their eminent domain dispute and the related proceeding currently before the New Hampshire Public Utilities Commission ..." Pennichuck said in a statement. The deal, which values Pennichuck at $200 million including debt, is expected to be financed through the issuance of general obligation bonds. Pennichuck, which has a market value of about $113.8 million, said Boenning & Scattergood and others were advising it on the deal. Shares of the Merrimack, New Hampshire-based company were up 13 percent in morning trade, after closing at $24.4 on Thursday on Nasdaq. They jumped 16 percent to reach $28.39 earlier in the session. (Reporting by Vaishnavi Bala in Bangalore; Editing by Roshni Menon) Keywords: PENNICHUCK NASHUACITY (email@example.com; within U.S. +1 646 223 8780; outside U.S.
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