Teco Energy Inc. said Thursday that it is exploring strategic options, including a potential sale.

The Florida-based utilities company's stock price surged 16% in after-hours trading to $21.48.

Teco its announcement was in response to market rumors and that the company had retained Morgan Stanley as an adviser. It said it doesn't intend to make further statements until it enters into a possible sale.

In June, Teco said a deal to sell its coal subsidiary to Kentucky-based Cambrian Coal Corp. didn't close, and that it has entered into a letter of intent with a new buyer. According to Teco, Cambrian Coal couldn't satisfy its closing conditions.

Teco Coal has operations in Tennessee, Kentucky and Virginia. Teco Energy operates other businesses, including Tampa Electric. Peoples Gas System in Florida, and New Mexico Gas Co., a natural-gas distributor.

Write to Angela Chen at angela.chen@dowjones.com

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