* Teco shares jump, but remain below offer price
* Emera to have $20 bln in assets after deal
(Adds background)
Sept 4 (Reuters) - Canadian energy company Emera Inc
EMA.TO will acquire U.S. electric and gas utility holding
company Teco Energy Inc TE.N for $6.44 billion to expand in
the United States.
Shares of Teco, which operates in Florida and New Mexico,
rose to $26.70 in extended trading on Friday, below the offer
price of $27.55 per share in cash.
The deal is valued at $10.4 billion including the assumption
of about $3.9 billion in debt, the companies said in a
statement.
Teco had 233.6 million shares outstanding as of June 30.
Emera's total assets are expected to increase to about $20
billion from $9.89 billion after the deal, and will see it serve
more than 2.4 million electric and gas customers.
A majority of those assets will be based in Florida, where
Teco operates its Tampa Electric and Peoples Gas System
utilities.
Currently, Emera has investments in northeastern North
America and in four Caribbean countries.
Utilities regulators for the District of Columbia last week
denied Exelon (NYSE:EXC) Corp's EXC.N $6.8 billion bid for Pepco Holdings
Inc POM.N , dealing a major blow to a deal that would have
created the top power distributor in the United States.
The Teco deal is expected to add to Emera's earnings in the
first year after it closes.
Teco said in July that it was "exploring strategic
alternatives."
J.P. Morgan was Emera's lead adviser and Davis Polk &
Wardwell LLP and Osler, Hoskin & Harcourt LLP were its legal
advisers.
Morgan Stanley (NYSE:MS) was Teco's lead strategic adviser and Skadden
Arps, Slate, Meagher & Flom LLP and Holland & Knight LLP were
its legal advisers.