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Carolina P&L acquisition
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August 23, 1999: 8:52 a.m. ET
Utility offers $5.3B cash and stock for Florida Progress
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NEW YORK (CNNfn) - Carolina Power & Light Co. said Monday it will buy fellow utility Florida Progress Corp. for cash and stock worth $5.3 billion, or about $54 per share.
The deal, which comes at about a 21-percent premium over Friday's close for Florida Progress shares (FPC), will form the nation's ninth-biggest electricity and energy provider, with a market value of roughly $8 billion.
In pre-market trading Monday, shares of St. Petersburg-based Florida Progress jumped to 49 after closing up 1 at 44-5/8 Friday. CP&L (CPL), of Raleigh, N.C., rose 1/16 to 39 Friday.
CP&L plans to cut about 1,250 jobs as part of the deal, or about 7 percent of the combined companies' staff. The two companies don't have overlapping operations, and a CP&L spokesman said the job cuts will come mainly in administrative posts.
"The acquisition of Florida Progress represents a major step toward fulfilling our strategic plan of becoming a leading energy provider in the Southeast," said William Cavanaugh, chairman, president and CEO of CP&L.
The deal is expected to boost CP&L's earnings about 8 percent a year and will more than double its customer base, adding 1.3 million users in Florida to its current base of 1.2 million.
CP&L will pay a maximum of 65 percent in cash and 35 percent in stock. The companies agreed to a "collar" on the price between an upper end of $45.39 per share and a lower end of $37.13 per share of CP&L stock.
Merrill Lynch was financial advisor for CP&L; Salomon Smith Barney advised Florida Progress. The companies set a termination fee of $150 million and said they expect the deal to close within a year. 
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