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Harmony board drops Drax bid in favour of Foresight offer
(Sharecast News) - Harmony Energy Income Trust (HEIT) announced on Thursday that it has agreed to a recommended cash acquisition by PP Bidco, a company indirectly controlled by funds managed by Foresight Group. The deal valued HEIT at £209.9m, and would be implemented through a court-sanctioned scheme of arrangement under the Companies Act.
Under the agreement, HEIT shareholders would receive 92.4p per share in cash, representing a 5% premium to the previously-recommended offer from Drax Bidco, a 42% premium to HEIT's share price at the start of the offer period in March 2025, and a 94% premium to the price in May 2024 before HEIT launched a sale process for its assets.
The HEIT board unanimously endorsed the Foresight-backed offer as a superior proposal in terms of both value and deliverability.
As a result, the board said it had withdrawn its support for the Drax offer, and planned to adjourn the shareholder meetings scheduled for 7 May related to that proposal.
Shareholders were urged not to take any action regarding the Drax bid.
PP Bidco had already secured irrevocable undertakings and a letter of intent representing approximately 55.5% of HEIT's issued share capital, including commitments from major shareholders such as Harmony Energy, PrimeStone Capital, Newton Investment Management, and Schroder & Co.
HEIT's board highlighted that despite building a portfolio of eight fully operational battery energy storage system (BESS) projects across the UK, persistent sector headwinds had caused it to trade at a significant discount to net asset value.
It said it believed the acquisition offered shareholders a compelling opportunity to realise value in cash at a premium that exceeded HEIT's standalone medium-term prospects as a listed entity.
Foresight, through its managed funds, was already a significant investor in renewable energy and battery storage infrastructure across the UK and Europe.
The firm described HEIT's assets as highly complementary to its portfolio, saying it saw the acquisition as strategically aligned with its long-term investment goals.
Completion of the transaction remained subject to shareholder and court approval, and was expected in the second quarter.
Reporting by Josh White for Sharecast.com.
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