TECO Energy offers cash, stock for 9.5% ACES

New York, July 28 - TECO Energy Inc. announced an offer to exchange cash and stock for up to 17.865 million of its equity security units in the ACES structure.

The Tampa, Fla., energy company will pay 0.9509 shares and $1.39 in cash for each unit.

TECO stock closed at $12.36 Tuesday.

TECO originally issued 17.965 million of the units in January 2002 at par of $25, raising $459 million in cash. Each unit consists of a forward purchase contract requiring the holder to buy TECO common stock on Jan. 15, 2005 and a trust preferred security securing the purchase obligation. The exchange will result in early settlement of the purchase contract and as a result the trust preferreds will no longer be outstanding.

At maturity, the convertibles will be exchanged for 0.83056 or 0.95274 shares, depending on the stock price at the time.

The early settlement offer runs through midnight ET on Aug. 24.

Merrill Lynch & Co. (888 654-8637) and J.P. Morgan Securities Inc. (800 261-5767) are co-lead dealer managers, Morrow & Co. is the information agent (800 607-0088, banks and brokerage firms call 800 654-2468) and the Bank of New York is the exchange agent.

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