Teco Energy was one of the biggest movers in after market trading on Friday. The shares surged by close to 24 percent on the back of heavy volumes which is being seen as a huge positive and is indicative of the shift of momentum towards the buy side. The surge in the stock was on the back of report that Teco Energy would be acquired by Emera Inc.which is being seen as a huge positive by the investor and analysts community on the street.
In what is being seen as a consolidation in the energy sector it was reported today that Canadian energy and services company Emera would be acquiring Teco Energy, an electric and gas utility company that does business in Florida and New Mexico for about $6.48 billion. According to the details of the deal, Emera Inc. would pay close to $27.55 per share of Teco Energy which is a 31 percent premium over Friday’s closing price. The companies valued the deal at $10.4 billion including debt. It is imperative to state that Emera has investments through the Northeastern US and Canada as well as the Carribean. The CEO of Emera said that Teco is an ideal match for the company.
According to reports, the companies expect to complete the sale by mid 2016. In a statement, the acquiring company said that Emera would continue Teco’s efforts to sell its coal business and plans on completing the sale by time its acquisition of Teco closes. Shares of Teco Energy have been in a strong uptrend ever since reports of a possible sale were made public. The relative strength index for the stock have given a buy signal which is indicative of the inherent strength and is considered to be a bullish sign. Traders expect prices to head to levels of $27 in the near term.