TECO Energy, Inc.LifeLock, Inc. (LOCK) Up on Emera Buyout

Shares of Tampa, Florida, based TECO Energy, Inc. (TE) rose on Tuesday, against the backrop of much major rally in stocks overall. TECO's stock was up 25.01%, rising $5.27 per share, to close at $26.34, on volume of 30,792,512 shares. TECO's stock was up on the announcement last Friday that the company will be acquired by Canadian energy company EMERA (EMRAF) in a deal estimated to be worth $6.48 billion.

Founded in 1981, TECO Energy, Inc. is a holding company providing retail electric and gas utility services.
It operates through Tampa Electric and People Gas System (PGS) segments. The Tampa Electric segment provides generation, purchase, transmission, distribution, and sale of electric energy, while PGS manages the purchase, distribution and marketing of natural gas. The segments operate in Florida and New Mexico. The company's stock trades on the NYSE.

On Friday it was announced that TECO would be acquired by Emera for $6.48 billion, or $27.55 per share. Based on the purchase price, TECO is valued at $10.48 billion including the assumption of $3.9 billion in debt. The combination of Emera and TECO will result in an entity with over $20 billion in assets and a customer base in excess of 2.4 million gas and electric customers. The offer price represents a 4.6% premium over Tuesday's closing price. The sale is expected to be completed by the middle of 2016, after which TECO will become a wholly owned subsidiary of Emera.

Founded in 1998, Halifax, Canada, based Emera, Inc. is an energy and services company that invests in electricity generation, transmission and distribution, in addition to gas transmission and utility energy services. It operates throughout northeastern North America and in three Caribbean countries. On Tuesday, the company's stock fell $1.47 on the news of the buyout of TECO, down 4.38%, to close at $32.01, on volume of 10,281 shares.

The buyout of TECO will make Emera one of the top 20 North American regulated utility, with operations spread across several regions and states, and with significant growth potential. The acquisition is expected to support Emera's 8 percent dividend growth target through 2019 and beyond. The the buyout is subject to approval by TECO Energy common shareholders, as well as regulatory approval.

"TECO Energy's team members have worked hard to consistently generate strong financial and operating results from our regulated businesses and have positioned the company well for long-term earnings growth," said TECO Energy President and CEO John Ramil, "We are proud that Emera has recognized the value of our business and that our shareholders will be rewarded for their confidence in our company. The TECO team looks forward to contributing to Emera's bright future and the opportunities for growth across the organization."
"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 and one that advances our strategic objectives," said Chris Huskilson, President and CEO of Emera Inc. "We have found our ideal match in TECO Energy."

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Published on Sep 9, 2015
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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