Energy company Drax says its offer for battery storage investment firm Harmony Energy Income Trust (HEIT) has lapsed following its decision not to increase the bid.
Drax had faced rival bidder Foresight Group which looks set to take over the investor in a deal that values it at £209.9m. HEIT's portfolio includes the Rusholme battery storage facility at Drax's North Yorkshire site, along with other locations in County Durham, Surrey and East Yorkshire, among others.
A subsidiary of the power generator, Drax Bidco, had been set up to mount the acquisition bid. But HEIT's board recommended a counter offer from Foresight of 92.4p per share, a 5% premium to Drax’s previous offer in March. Drax confirmed its offer had lapsed in a message to investors on the London Stock Exchange.
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It had been hoped that HEIT could help bolster Drax's FlexGen portfolio, allowing it to capture the spread between overnight electricity prices and peaks as well as benefit from market volatility and add rapid and short duration capability. The two firms had made significant progress on a deal, but HEIT's board concluded the Foresight offer was superior, both in terms of price and "deliverability" for its shareholders.
At the time, Norman Crighton, chairman of HEIT, said: "Since its launch in 2021, HEIT has grown its portfolio of BESS assets in the 海角视频, today consisting of eight 100% operational projects (790.8 MWh / 395.4 MW) across Great Britain. Despite positive progress in this regard, significant headwinds have curtailed HEIT's revenue growth opportunities, resulting in HEIT trading at a material and persistent discount to net asset value.
"The HEIT board believes that value to HEIT shareholders will be maximised through the terms of the acquisition, with the acquisition price being at a premium to the previously announced Drax offer. 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."
Richard Thompson, partner at Foresight, said: "We believe that HEIT will be a highly complementary addition to our existing managed portfolio of high quality 海角视频 battery storage assets and other investments in renewable energy, storage and grid infrastructure. Our offer provides meaningful value for HEIT shareholders. "