-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Oc0Dnq0hWXFwJbU8AEndgC0Oq2aug/Q64P9vVuRtzb3cCVIq7T7aQgayA62I6qp+ z1GyvFhh4V+HS/5iIcSpPw== 0000350563-96-000039.txt : 19961126 0000350563-96-000039.hdr.sgml : 19961126 ACCESSION NUMBER: 0000350563-96-000039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961121 ITEM INFORMATION: Other events FILED AS OF DATE: 19961125 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TAMPA ELECTRIC CO CENTRAL INDEX KEY: 0000096271 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 590475140 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05007 FILM NUMBER: 96671771 BUSINESS ADDRESS: STREET 1: 702 N FRANKLIN ST CITY: TAMPA STATE: FL ZIP: 33602 BUSINESS PHONE: 8132284111 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 21, 1996 TAMPA ELECTRIC COMPANY (Exact name of registrant as specified in its charter) FLORIDA 1-5007 59-0475140 (State or other jurisdiction (Commission file (IRS Employer of incorporation) Number) Identification No.) 702 North Franklin Street, Tampa Florida 33602 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (813) 228-4111 Page 1 Item 5. Other Events On Nov. 21, 1996, TECO Energy, Inc. ("TECO Energy"), parent of Tampa Electric Company, and Lykes Energy, Inc. ("LEI") entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which TECO Energy will acquire LEI through the merger of LEI with and into TECO Energy or, subject to certain conditions, with a wholly-owned subsidiary of TECO Energy (the "Merger"). A copy of the Merger Agreement is included herewith as Exhibit 2.1 and incorporated herein by reference, and the press release announcing the transaction is included as Exhibit 99.1. LEI is a privately-held holding company whose two largest subsidiaries are Peoples Gas System, Inc. ("PGS") and Peoples Gas Company ("PGC"). PGS is a natural gas utility that serves approximately 200,000 customers wholly within peninsular Florida. PGC sells liquified petroleum gas, or propane, to more than 35,000 customers, primarily within peninsular Florida. Contemporaneously with the Merger, TECO Energy plans to merge PGS into Tampa Electric Company and operate PGS as a separate division. Subject to conditions relating to the trading price of TECO Energy Common Stock described below, on the closing date of the Merger all of the outstanding shares of Common Stock of LEI will be converted into a number of shares of Common Stock of TECO Energy having a market value of $300,000,000 based upon the average closing price of TECO Common Stock on the New York Stock Exchange during the twenty trading days ending on the third trading day prior to the closing (the "Market Value"). Based on the number of shares of TECO Common Stock outstanding on Nov. 22, 1996, an aggregate of between 11,009,174 and 13,483,146 shares of TECO Common Stock will be issuable in the Merger, representing between approximately 8.6 percent and 10.3 percent of the total number of shares of TECO Common Stock to be outstanding after such issuance. The Merger is intended to be a tax-free reorganization and to be accounted for as a pooling of interests. Page 2 Item 5. Other Events (continued) Completion of the acquisition, currently expected to occur by mid-1997, is subject to certain conditions, including approval of the holders of a majority of the outstanding shares of LEI Common Stock, the approval of r e g ulatory authorities, and other closing conditions customary in a transaction of this type. The Merger Agreement is subject to termination in certain circumstances, including if the Merger is not consummated by Dec. 31, 1997. In addition, LEI may terminate the Merger Agreement if the Market Value per share of TECO Common Stock is less than $20.50 unless TECO Energy agrees to increase the number of shares of TECO Common Stock to be issued in the Merger as provided in the Merger Agreement. TECO Energy may terminate the Merger Agreement if the Market Value per share of TECO Common Stock is greater than $29.00 unless LEI agrees to accept a lesser number of shares of TECO Common Stock in the Merger as provided in the Merger Agreement. Concurrently with execution of the Merger Agreement, the parties entered into a stock option agreement (the "Option Agreement") under which LEI granted to TECO Energy an option to purchase 212,664 shares of LEI Common Stock, representing 19.9 percent of the outstanding LEI shares, at a price of $280.72 per share. A copy of the Option Agreement is Exhibit A to the Merger Agreement included as Exhibit 2.1 hereto and is incorporated herein by reference. TECO Energy's right to exercise such option is subject to the occurrence of certain termination events under the Merger Agreement which require LEI to pay a specified termination fee to TECO Energy. The aggregate amount payable to TECO Energy pursuant to the Option Agreement and such termination fee is limited to $15,000,000. The foregoing summary of the Merger Agreement and the Option Agreement is qualified in its entirety by reference to Exhibit 2.1 hereto. Page 3 Item 7. Financial Statements and Exhibits (C) Exhibits *2.1 Agreement and Plan of Merger dated Nov. 21, 1996 between TECO Energy and Lykes Energy, Inc. (Exhibit 2.1 to Registration Statement on Form S-4 of TECO Energy, Inc. filed on Nov. 22, 1996, Registration No. 333-16683). 99.1 Press Release dated Nov. 22, 1996. * Indicates exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. Page 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: Nov. 25, 1996 Tampa Electric Company By: W. L. Griffin Vice President - Conroller (Principal Accounting Officer) Page 5 INDEX TO EXHIBITS Exhibit No. Description of Exhibits Page No. 2.1 Agreement and Plan of Merger dated * Nov. 21, 1996 between TECO Energy and Lykes Energy, Inc. (Exhibit 2.1 to Registration Statement on Form S-4 of TECO Energy, Inc. filed on Nov. 22, 1996, Registration No. 333-16683). 99.1 Press Release dated Nov. 22, 1996 7 * Indicates exhibit previously filed with the Securities and Exchange Commission and incorporated herein by reference. Page 6 EX-99 2 Exhibit 99.1 TECO ENERGY LETTERHEAD FOR IMMEDIATE RELEASE Contact: Mike Mahoney Office: 813/228-4271 Internet: http://www.teco.net Home: 813/991-6229 TECO ENERGY AND LYKES ENERGY ANNOUNCE MERGER VALUED AT $300 MILLION TAMPA, Nov. 22, 1996 -- TECO Energy, Inc. (NYSE:TE) and Lykes Energy, Inc. today announced they have signed a definitive agreement to merge in a tax-free, stock-for-stock transaction with an equity value of $300 million. The number of TECO shares to be issued will depend on the average market price during a specified period prior to the closing, subject to a collar. Based on yesterday s closing price of $24.75, the number of shares would be approximately 12.1 million. This merger, to be accounted for as a pooling of interest, has been approved by both companies boards of directors. TECO Energy anticipates that the transaction will initially be slightly dilutive to earnings with favorable future growth prospects. The principal subsidiary of Lykes Energy is Peoples Gas System, Inc., a regulated, retail gas distributor in Florida. It will retain its identity and operate as a separate division within the TECO group of companies. Lykes Energy also owns Peoples Gas Company, a propane business, as well as a unit involved in natural gas marketing. Page 7 Lykes Energy shareholders will receive shares of TECO Energy common stock for shares of Lykes Energy common stock they currently hold. The current TECO Energy quarterly dividend of 28 cents per share remains in effect and will not be affected by the transaction. According to TECO Energy Chairman and Chief Executive Officer Timothy L. Guzzle, This merger represents a logical move for both companies. For us, it is another important step in the growth of our family of businesses in the energy sector, where we have had good success. Said Guzzle, We already have important investments in natural gas exploration and production, and this combination will allow us to expand our participation in the nation s natural gas industry. We re fully committed to growing these new businesses. Tom Rankin, Lykes Energy chairman and chief executive officer, said, "With this merger, two strong Tampa-based companies with proud traditions and proven track records are joining together, and that s great news for shareholders, employees and the customers of both companies. John Brabson, current president of Lykes Energy, said, We re combining because we want to continue to grow our businesses, as does TECO Energy, and we see this as an excellent fit. The combination of our two companies will enhance the value of the service we provide our customers, said Guzzle. It will enable us to expand the range and types of services we offer, while capitalizing on the resources that exist within all our businesses. Page 8 Brabson has agreed to continue to serve as chairman of the Peoples Gas businesses for a period of six months following the closing to assist with the transition. He will report to Guzzle. William N. Cantrell, currently vice president-Energy Supply at Tampa Electric, will lead a transition team put in place to direct merger activities. In this capacity, he will report to Girard F. Anderson, president and chief operating officer of TECO Energy. Peoples Gas System is Florida s largest natural gas distribution company with retail operations in all of the state s major metropolitan communities. As of Sept. 30, the company served over 200,000 customers and recorded annual sales of 86 BCF of natural gas. The companies expect some cost savings and efficiencies as a result of the merger. Savings mainly will be derived from the elimination of duplicative overhead and administrative activities, as well as improved operating efficiencies and lower interest costs. Said Brabson, At the gas company, we already had begun a productivity review and restructuring which could result in changes in job responsibility and possible reductions in the workforce. That process is intended to allow us to become more competitive and to continue to grow our company. It is not anticipated that the merger itself will lead to any major layoffs or downsizing. Guzzle said, We look forward to building on the excellent work done by John Brabson and his team at Peoples as well as their strong tradition of service to customers throughout Florida. We will commit resources and major effort to continue that growth. Page 9 The merger is conditioned, among other things, upon the approval of Lykes Energy s shareholders and necessary regulatory approvals. Closing is expected by mid-year 1997. TECO Energy is a diversified, energy-related utility holding company based in Tampa. Its principal subsidiary is Tampa Electric, a regulated electric utility covering a 2,000 square-mile service area in west central Florida. Other businesses include TECO Transport & Trade, TECO Coal, TECO Coalbed Methane, TECO Gas & Oil, TECO Power Services and TeCom, which is marketing an advanced, interactive energy management and communications system. -30- Page 10 Financial Highlights (all amounts except customers 000 s) Lykes Energy Consolidated (Fiscal Year-end 9/30) 1996 1995 1994 Revenues $299,585 $254,001 $267,071 Net Income $ 15,950 $ 12,754 $ 11,779 Total Assets $327,839 $312,172 $300,803 Equity $106,634 $ 95,244 $ 86,766 Natural gas sold & transported - therms 859,799 980,992 819,634 Natural gas customers 200,755 196,342 190,809 TECO Energy Consolidated 1996 1995 1994 12 months ended 9/30 12 months ended 12/31 Revenues $1,437,812 $1,392,285 $1,350,853 Net Income $ 195,153 $ 186,127 $ 153,177 Total Assets $3,584,292 $3,473,367 $3,312,162 Equity $1,314,195 $1,240,887 $1,163,371 Total megawatt 17,832 17,306 16,034 hours sold Electric customers 505,691 501,938 491,136 Page 11 -----END PRIVACY-ENHANCED MESSAGE-----