LONDON: Drax BESS Holdco Limited, a wholly owned subsidiary of Drax Group plc, has agreed to acquire Harmony Energy Income Trust Plc (HEIT) in a recommended cash deal valued at approximately £199.9 million.
Under the terms of the acquisition, HEIT shareholders will receive 88 pence per share, representing a 35% premium over HEIT’s closing price of 65.2 pence on March 14, 2025. The deal is expected to be completed by the end of the second quarter of 2025, pending shareholder and regulatory approvals.
The acquisition will expand Drax’s battery energy storage system (BESS) portfolio, enhancing its ability to stabilize the U.K. power grid amid increasing renewable energy generation. HEIT’s eight operational BESS projects, totaling 790.8 MWh, complement Drax’s existing flexible generation assets.
Will Gardiner, CEO of Drax Group, said: “This investment supports U.K. energy security and delivers a cleaner power system. Battery storage helps balance supply and demand, especially when renewable generation is low.”
HEIT’s board has unanimously recommended the deal, with 19.6% of shareholders already pledging support. Panmure Liberum, advising HEIT, deemed the terms “fair and reasonable.”
Norman Crighton, HEIT’s non-executive chair, stated: “This offer maximizes value for shareholders, providing an attractive cash exit above HEIT’s standalone prospects.”
The acquisition will proceed via a scheme of arrangement, requiring approval from 75% of voting shareholders at a court-sanctioned meeting. Regulatory clearance under the National Security and Investment Act is also required.
The scheme document will be published within 28 days, with further details available on HEIT’s website.
Drax Group operates renewable energy assets across the U.K. and U.S., including biomass, hydro and pumped storage. The company reported £6.16 billion in revenue and £1.06 billion in adjusted EBITDA for 2024.