25th Mar 2025 10:34
(Alliance News) - Drax Group PLC on Tuesday said it has agreed to buy Harmony Energy Income Trust PLC.
Drax, a Selby, England based electricity generator, said it will buy Harmony Energy, which invests in battery energy storage systems in the UK, for 88.0 pence per share, valuing the entire trust at GBP199.9 million.
It is 4.8% higher than a potential offer of 84.0p each by Foresight Group Holdings Ltd, that Harmony Energy last week had announced it was "minded to accept". Tuesday's announcement was made jointly by Drax and Harmony Energy.
Drax's offer is also 11% higher than Harmony Energy's closing share price of 79.2p on Monday.
Harmony Energy shares duly jumped 11% to 88.02p on Tuesday morning in London.
Drax shares were up 1.0% to 593.00 pence, while Foresight Group shares were up 1.4% to 368.00p.
Drax expects the takeover to complete around the second quarter of 2025.
"Adding battery storage to our FlexGen portfolio enables us to provide even more secure power to the country when it is needed," Drax said.
It added: "In combination with our long duration storage, flexible generation, demand side response capabilities and renewable generation from biomass, we will be able to supply 4.5 gigawatt of dispatchable generation to meet demand."
Drax noted that 19.6% of Harmony Energy shareholders are already supportive of the takeover, with the deal conditional on receiving 75% approval at Harmony Energy's general meeting.
"We are working to create value and growth in the short, medium and long-term, aligned to the UK's energy needs, and which the Drax directors believe is underpinned by strong cash generation, a disciplined approach to capital allocation and attractive returns for shareholders," Drax added.
Harmony Energy Chair Norman Crighton commented: "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."
Foresight Group issued no immediate response to the Drax announcement.
By Tom Budszus, Alliance News slot editor
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Related Shares:
DraxHarmony EnergyForesight Group Holdings