Drax has outbid Foresight Group LLP to acquire the share capital of the publicly-listed Harmony Energy Income Trust (HEIT) for £200 million.
A wholly owned subsidiary of Drax specialised in battery energy storage systems (BESS), Drax BESS Holdco (Drax Bidco), made a cash offer of 88p per share, valuing HEIT at £199.9 million.
Foresight’s offer, which HEIT was poised to accept if made firm, was for 84p per share, making up a total of £190.8 million.
In a results announcement released in late February 2025, covering the year up to 31 October 2024, HEIT’s Net Asset Value (NAV) was established at £201.05 million, or 88.52p per ordinary share. Drax’s offer is a 5% premium over Foresight’s and equates to a 35% premium on the share price before clean energy generation and infrastructure investment group Foresight’s offer, which was made on 17 March.
According to its most recent results filing, HEIT’s NAV has been declining year over year, falling by 23.3%, or 26.89% per ordinary share, since 31 October 2023.
The income trust acquires ready-to-build BESS assets. According to the acquisition announcement, Drax sees the takeover as a “compelling opportunity” to add operating BESS assets to the wider Drax group’s FlexGen portfolio.
HEIT’s directors will recommend unanimously that shareholders vote in favour of the Drax acquisition, which is contingent on their approval. The two companies noted that HEIT shareholders representing 19.6% of HEIT’s issued ordinary share capital have already lodged support for the transaction.
The trust was launched in November 2021 and has a fully operational portfolio of eight 2-hour duration BESS projects totalling 790.8MWh/395.4MV.
Non-executive chair of HEIT Norman Crighton said these assets have “attracted a strong level of interest” since the potential bid from Foresight and the recommended offer by Drax.
He continued: “The HEIT board believes that value to HEIT shareholders will be maximised through the terms of the acquisition. Further, the HEIT board believes that the acquisition will provide HEIT shareholders with the opportunity to realise the value of their holdings, in cash, at an attractive value which is in excess of the reasonable medium-term prospects for HEIT on a standalone basis as a listed company.”
Drax Bidco was incorporated on 27 December 2024 and has not traded since then. The wider Drax group operates a generation portfolio of biomass, hydro-electric and pumped storage hydro assets in England and Scotland and is developing three open cycle gas turbine assets in England and Wales.
According to Drax Group’s chief executive officer, adding battery storage to the firm’s FlexGen portfolio will enable it to supply 4.5GW of dispatchable generation to meet demand.
