TECO Energy, Inc. TE has responded to the rumors regarding the possible sale of its business. The company has confirmed that it is indeed seeking strategic alternatives to sell the business.

The Tampa, FL-based utility company is taking advice from Morgan Stanley & Co. LLC MS for exploring relevant alternatives. Neither has the company made any additional comments regarding the sale nor does it intend to do so in the future unless it enters into a binding, definitive agreement with respect to a sale.

Although TECO Energy took much time to respond, the stock had already started soaring on heavy trading volumes during mid-day trading after SparkSpread, an online news service, reported a possible sale of the business yesterday. Consequently, shares spiked 15.6%, to close at $21.48 yesterday.

Currently, utility companies have been considering mergers and acquisitions as viable alternatives to cope with shrinking sales, increasing costs to meet new environmental regulations and the urgency to upgrade aging infrastructure.

Recently, U.S.-based electric utility provider, Black Hills Corporation BKH announced that it has entered into an agreement to acquire SourceGas Holdings LLC for an approximate consideration of $1.9 billion.

Subject to various regulatory approvals, the transaction is expected to be completed in the first half of 2016. Black Hills Corp. will operate the acquired company under the name Black Hills Energy. (Read More: Black Hills (BKH) to Acquire SourceGas Holdings for $1.9B)

Last month, yet another utility company, Wisconsin Energy Corporation, completed the acquisition of Integrys Energy and formed WEC Energy Group WEC. The combined entity will become one of the largest utilities of the Midwest, serving 4.4 million customers in Wisconsin, Illinois, Michigan and Minnesota. It will have a power generation capacity of 8,803 megawatts.

Currently, TECO Energy carries a Zacks Rank #2 (Buy).

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