Drax to buy Harmony Energy Income Trust in £199.9m deal

(Sharecast News) - Drax said on Tuesday that it has agreed to buy Harmony Energy Income Trust - a company that invests in battery energy storage systems in the UK - for around £199.9m. Under the terms of the deal, Drax will pay 88p per share in cash. This is a premium of about 5% to the Foresight Group offer of 84p last week and a 35% premium to the closing share price on 14 March, which was the day before the Foresight offer.

Drax chief executive Will Gardiner said: "The acquisition is a significant investment in growing our FlexGen portfolio, supporting UK energy security and delivering a clean power system.

"The Drax directors believe that adding battery storage to our FlexGen portfolio enables us to provide even more secure power to the country when it is needed. In combination with our long duration storage, flexible generation, demand side response capabilities and renewable generation from biomass, we will be able to supply 4.5GW of dispatchable generation to meet demand."

Norman Crighton, the non-executive chair of HEIT, said: "Since its launch in November 2021, HEIT has assembled a fully operational portfolio of eight 2-hour BESS projects totalling 790.8 MWh / 395.4 MV, which have attracted a strong level of interest through both our recent asset sale process and now through a potential bid from Foresight and the recommended offer by Drax.

"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."