TECO Energy Inc.'s longtime insistence that it wants to remain independent hasn't prevented takeover speculation from arising now and then. But Southern Co. of Atlanta, one of the utilities most frequently cited on Wall Street as a potential acquirer, isn't interested, according to its executive vice president and chief financial officer, Tom Fanning.
Southern, the parent of Pensacola's Gulf Power Co., gets name-checked by would-be TECO matchmakers because it's larger, healthier and in the neighborhood. But Fanning, who was in Pensacola last week with other Southern executives to check on Gulf Power's recovery efforts after Hurricane Ivan, said acquiring the heavily indebted Tampa utility wouldn't be compatible with Southern's financial goals. Those goals include maintaining an annual earnings growth rate of at least 5 percent and ensuring that any acquisitions add to earnings within months and not hurt the company's credit rating.
Fanning said Southern's low-risk strategy is in line with the interests of its shareholders, who are attracted to the company's stable investment returns and reliable, annual increases in its dividend. Like TECO, Southern made significant investments in unregulated wholesale power via its subsidiary Mirant Corp. But Southern got out of the business before the wholesale market soured, spinning off Mirant in 2001. Two years later, Mirant filed for Chapter 11 bankruptcy protection.
When asked if he could rule out any future interest in TECO, Fanning replied, "I don't like absolutes." But he stressed that any such deal should be considered "exceedingly unlikely."
