Emera to buy Florida utility Teco Energy for $6.5-billion
Halifax power company Emera Inc. has agreed to buy Teco Energy Inc., owner of the electric utility in Tampa, Fla., for $6.5-billion (U.S.) on Friday.
Under the terms of the all-cash agreement, Teco Energy shareholders will receive $27.55 per common share, a 48-per-cent premium based on Teco’s July 15 closing stock price and 25 per cent above its 52-week high, the companies said in a statement. The deal will also assume about $3.9-billion in debt, the statement shows, bringing the total deal to $10.4-billion.
The deal comes as electric utilities across the country are moving to consolidate to cope with tepid sales, rising costs and tougher regulations. Power suppliers are working on an estimated $40-billion in mergers and acquisitions, data compiled by Bloomberg show. Tampa-based Teco, which also owns gas utilities in Florida and New Mexico and coal mines in Kentucky and Virginia, said in July that it had hired Morgan Stanley to organize the sale.
“Our patient approach and disciplined investment criteria have resulted in a pure-play regulated utility transaction that we expect to be significantly accretive for Emera’s shareholders,” said Chris Huskilson, president and chief executive officer of Emera. “We have found our ideal match in Teco Energy.”