Oct. 20--WEST PALM BEACH -- Over the years, Florida Public Utilities Co., has added smaller companies to its fold, from Sanford Gas in 1965 to propane businesses such as Z-Gas and Atlantic Utilities in 2002.

Now, if shareholders approve a proposed merger, the West Palm Beach-based firm known as "the gas company" could be swallowed up by a larger company. Under the proposal Florida Public Utilities would become a wholly-owned subsidiary of Dover-Del.-based Chesapeake Utilities Corp. Its building at 401 N. Dixie Highway in downtown West Palm Beach will become the combined company's Florida headquarters.

Both companies' shareholders are scheduled to vote on the merger Thursday, Chesapeake's in Wilmington, Del., and FPU's in West Palm Beach. The merger must be approved by more than 50 percent of the shareholders of each company to take effect, said FPU CFO George Bachman.

Founded in 1924 as Palm Beach Gas Co., the company has been known as Florida Public Utilities since 1927. The combined company will operate as Florida Public Utilities in Florida. But the stock ticker FPU, traded on the American Stock Exchange, will no longer exist. In the proposed $73.4 million stock swap, for each share of FPU stock, FPU shareholders will receive .405 shares of Chesapeake stock, traded on the New York Stock Exchange under the ticker CPK, said Beth Cooper, Chesapeake's senior vice president and chief financial officer.

"This is the first public company transaction we as a company have done," Cooper said. "We are predominantly a Delmarva (Delaware, Maryland, Virginia) based company. We have a small Florida presence. They bring the presence in Florida that really takes us to the next level."

While executives at both companies view the proposed merger as a great strategic fit that will benefit the customers and shareholders, employees who contacted The Palm Beach Post said they are worried about layoffs and other possible changes.

Bachman said last week that as with any merger, there will be the possibility of overlap.

"Some employees may not have anything to do. There could possibly be some layoffs. It is undetermined at this time," Bachman said.

Unlike Chesapeake, FPU sells, installs and maintains gas fireplaces, pool heaters, water heaters, grills, household appliances, accessories and more and has four showrooms in Florida. Cooper and Bachman said that it should not be assumed those services will end.

"There are no plans that we will stop service. It gets down to profitability, like anything else," Bachman said.

Cooper said things won't necessarily be done "the Chesapeake way," but the way that is best for the combined company.

Chesapeake will be saddled with of the cleanup the Florida Department of Environmental Protection has mandated at FPU's operations center at 208 and 209 Sapodilla Ave.

Remediation at the location where FPU once manufactured gas, could cost $4 million to $18 million.

But with opposition from Rick Osborne, CEO and chairman of Great Falls-Mont.-based Energy Inc., whose wholly owned subsidiary owns 6.7 percent of FPU's stock, the merger's approval isn't necessarily a done deal.

"We just think the price is ridiculous. It was way too low," said Osborne. "I don't think the deal will get approved."

susan_salisbury@pbpost.com

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