A subsidiary of Drax (Drax Bidco) has beat a recent bid by Foresight Group to acquire battery operator Harmony Energy Income Trust (HEIT). Drax Bidco has offered 88p per share, valuing the company at £199.9 million.
Last week Foresight announced a proposal to pay 84p per share for the company, valuing HEIT at £190 million, but had not announced a formal bid.
The board of directors of Drax Bidco and HEIT said that shareholders representing 19.6% of HEIT’s share capital had undertaken to vote in favour of the acquisition.
Drax said the acquisition would offer add additional flexibility to its portfolio, specifically:
• the ability to perform daily cycling to capture the spread between overnight prices and peaks as well as benefit from market volatility events
• access to additional ancillary services markets by adding rapid and short duration response capability
• a complement to Drax’s existing 24/7 trading capability operating across wholesale, balancing and ancillary service markets.
Norman Crighton, the Non-Executive Chair of HEIT, said: “Since its launch in November 2021, HEIT has assembled a fully operational portfolio of eight two-hour BESS [battery] 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.”