Drax has Outbid Foresight Group LLP to acquire the stock capital of the listed Harmony Energy Income Trust (Heit) for £ 200 million.
A full subsidiary of Drax specialized in Battery Energy Storage Systems (Bess), Drax Bess Holdco (Drax Bidco), made a cash offer of 88p per share and appreciated Heit at £ 199.9 million.
The range of Foresight, which was ready to accept if it was made solid, was for 84 p per share, which was a total of £ 190.8 million.
In a statement of results that was released at the end of February 2025, with regard to the year until 31 October 2024, Heit’s Net Active value (NAV) was set up at £ 201.05 million, or 88.52 p per ordinary share. The Drax offer is a 5% discount on this, but corresponds to a premium of 35% on the stock price before the FORESIGT offer, which was made on 17 March.
According to the most recent results of the results, the NAV from Heit has fallen year after year, by 23.3%, or 26.89% per ordinary share, since 31 October 2023.
The Income Trust acquires ready-to-build curricula. According to the announcement of the acquisition, Drax sees the acquisition as a “compelling opportunity” to add operational Bess activa to the flexgen portfolio of the wider Drax Group.
The directors of Heit will unanimously recommend that shareholders vote for the DRAX acquisition, which depends on their approval. The two companies noted that Heit shareholders who represent 19.6% of Heit’s ordinary share capital have already submitted support for the transaction.
The trust was launched in November 2021 and has a fully operational portfolio of eight 2-hour BESS projects of a total of 790.8 MWh/395.4 MV.
Non-executing chairman of Heit Norman Crighton said that these assets “have attracted a strong level of interest” because the potential bid from Foresight and the recommended range of Drax.
He continued: “The Heit Council is of the opinion that the value for Heit shareholders will be maximized by the conditions of the acquisition. Furthermore, the Heit Board is of the opinion that the acquisition shareholders will offer the possibility of realizing the value of their participations, in cash, at an attractive value of the reasonable term.
Drax Bidco was recorded on December 27, 2024 and has not traded since. The wider Drax Group has a generation portfolio of biomass, hydroelectric and pumped storage hydro assets in England and Scotland and develops three open cycle of gas turbine assets in England and Wales.
According to the Chief Executive Officer of DRAX Group, adding battery storage to the company’s flexgen portfolio will enable it to deliver 4.5 GW of shipping generation to meet the demand.
