Emera to buy Florida utility Teco Energy for $6.5-billion

The parent of Tampa Electric Co. and Peoples Gas announced late Friday it has sold the Tampa-based utility to Emera Inc.in a $10.4 billion transaction.

TECO Energy (NYSE:TE) has been assigned a consensus recommendation of “Hold” from the twelve research firms that are now covering the firm, Market Beat.com reports.

According to Zacks, “TECO Energy’s earnings in the second quarter of 2015 were in line with the Zacks Consensus Estimate but declined year over year”. The companies valued the deal at $10.4 billion including debt. As part of Emera’s commitment to the customers and communities in which it operates, operating boards will be established in Florida and New Mexico with local representation on both boards.

The Public Service Commission agreed in 2005 that the program was no longer cost-effective, but directed the utility to continue offering the program to enrolled customers, .

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 company also said the deal provides additional support to its 8 percent dividend growth target through 2019, and upon closing positions, Emera to extend the dividend growth target beyond 2019.

The sale comes less than two months after the TECO Energy confirmed rumors that it was considering a possible sale. Emera has investments throughout northeastern North America, and in four Caribbean countries. Tampa Electric Company, the principal subsidiary of TECO Energy, Inc., has two business segments. Peoples Gas System, the gas department of Tampa Electric Company, is engaged in the purchase, distribution and sale of natural gas for approximately 513,000 residential, commercial, industrial customers in the State of New Mexico.