Harmony Energy Income Trust (HEIT) and Foresight Group LLP have announced that they have agreed financial terms for a potential acquisition of HEIT by Foresight at 84p per HEIT share. The proposed transaction values HEIT’s ordinary share capital at £190.8m and is a 29% premium to the undisturbed closing share price of 65.2p on 14 March 2025 and a 76% premium to the closing share price of 47.8p on 29 May 2024, being the last business day prior to the date of the announcement of HEIT’s asset sale process.
Foresight says that it recognises HEIT’s leading platform and considers HEIT’s battery energy storage system (BESS) portfolio to be highly complementary with Foresight’s strategic mandate and Foresight’s existing investments in renewable energy and storage.
HEIT had made substantial progress towards selling its entire portfolio to a third party. However, having considered the possible cash offer from Foresight, HEIT’s board believes this would provide a superior outcome for its shareholders. HEIT’s board has therefore indicated to Foresight that, should a firm offer be made on the financial terms agreed, it would be minded to recommend it to its shareholders, subject to the agreement of the other terms of the offer. HEIT’s board is therefore engaging in discussions with Foresight to finalise those terms, although it adds that there can be no certainty that an offer will ultimately be made for the company.
Shareholder support
Foresight has received an irrevocable undertaking from Harmony Energy Limited to vote, or procure a vote, in favour of a firm offer at the terms agreed for 27,338,696 HEIT shares, which represents approximately 12.04% of HEIT’s ordinary share capital of HEIT.
[QD comment MR: While it is a welcome development that HEIT’s board has found what it believes is a better deal for shareholders, what the announcement doesn’t highlight is that comes at a discount to NAV of around 9%. This perhaps reflects the challenges that have been experienced with BESS assets in the UK recently, but progress is being made to resolve these and so Foresight could be getting quite a bargain, or, perhaps this raises some questions over the quality of HEIT’s NAV calculation in the first place. However, the read across for Gore Street Energy Storage (on a 52% discount) and Gresham House Energy Storage (on a 58% discount) suggests substantial upside in those share prices. In Gore Street’s case, the anticipated receipt of cash from its US tax credits could be the catalyst it needs to kickstart this process.]
