TECO Energy, Inc. (NYSE:TE) Exploring Strategic Options Including Possible Sale


Dallas, Texas 07/17/2015 (Financialstrend) – News that TECO Energy, Inc. (NYSE:TE) is exploring various strategic alternatives propelled the stock to a six-month high. However in a statement, the company was quick to point out that no assurance can be given on a potential sale or whether it was close to signing a definitive sales agreement.

Call Bets above $20

TECO Energy, Inc. (NYSE:TE) shares were jumping by as much as 18.5% in afternoon trading session touching the $22.02, a level that was last seen in January. The options market was busy on the announcement with most traders putting calls of above $20. Morgan Stanley remains the company’s adviser on the possible options it may seek to pursue going forward.

 Just like other utilities in the energy sector TECO Energy, Inc. (NYSE:TE) has been looking for potential merger partners and acquisitions as it continues to grapple with tepid sales. Its prospects have also been affected a great deal by an increase in costs for meeting environmental rules. Consolidation in the industry has turned out to be the only way, out of the current mess.

 Failed Spin-off

 It is only last month that TECO Energy, Inc. (NYSE:TE) failed to close a deal that could have resulted in the divestiture of its coal subsidiary to Kentucky-based Cambrian Coal. The deal reportedly failed to materialize on Cambrian failing meet all the closing conditions.

 For how long the stock will continue to trade at the current levels remains to be seen as the rally in the market was based on pure speculation. It is obvious that TECO Energy, Inc. (NYSE:TE) is weeks if not months away from a potential deal of any kind.

The company currently operates an electric utility, Tampa Electric, with 700,000 customers connected to the network. TECO Energy, Inc. (NYSE:TE)’s gas utility, Peoples Gas serves approximately 350,000 customers in Florida.  The company also has operations in New Mexico where its serves more than 513,000 customers with coal mining operations in Virginia, Kentucky, and Tennessee.