Teco execs jolt market with potential sale

TAMPA -- Teco Energy, a corporate staple in the Tampa community with $2 billion in revenues last year, says it's willing to entertain offers from potential buyers.

“While it is the long-standing policy of Teco Energy Inc. not to confirm or deny market rumors, in response to media reports concerning a potential sale of the company, the company confirmed that is is exploring strategic alternatives,” Teco officials say in a statement. “No assurance can be given that the company will determine to pursue a potential sale or enter into any definitive sales agreement.”

Helping Teco with those “strategic alternatives” is Morgan Stanley & Co., which the company hired as an advisor.

In the greater Tampa Bay area, Teco is surrounded by much larger utility powerhouses. That includes NextEra Energy's primary subsidiary, Florida Power & Light, which has 4.7 million customers, and the nation's biggest energy utility, Duke Energy, which has 7.3 million customers. Teco serves 1.6 million electric and gas customers in Florida and New Mexico.

Teco, in that competition, could be considered at a bit of a disadvantage. Its profit averaged $186 per electrical customer last year, compared to $258 for Duke and $524 for NextEra.

Teco already has struggled to find a buyer for its troubled coal division, first lowering the price significantly, and then bouncing between potential buyers. Teco Coal forced its parent to take a $115.9 million pre-tax charge last year, and is expected to add more in the current financial quarter.

News of a potential sale moved investors. Teco, which trades on the New York Stock Exchange under the symbol TE, closed Friday near its 52-week high of $21.28, up more than 16% from the week before.

Teco reported a net income of $58 million, or 25 cents per share, on revenues of $693 million for the quarter ended March 31. That compared to a $50.1 million, or 23 cents per share, profit the year before on revenues of $578 million.