Harmony Energy Income Share Discussion Threads

[willoicc] 30/5/2025 11:34:46

DRAX GROUP PLC LogoOffer Lapsed
DRAX GROUP PLC
Released 07:00:03 30 May 2025

RNS Number : 6813K
Drax Group PLC
30 May 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION



FOR IMMEDIATE RELEASE

30 May 2025
DRAX BESS HOLDCO LIMITED ("DRAX BIDCO")

Lapse of Drax Bidco's offer for HEIT

Further to the announcement made by Drax Bidco, a wholly-owned subsidiary undertaking of Drax Group plc, on 20 May 2025, Drax Bidco today confirms that its cash offer for the entire issued share capital of HEIT (the "Acquisition" or the "Drax Offer") has lapsed.

On 25 March 2025, the boards of directors of Drax Bidco and HEIT made an announcement pursuant to Rule 2.7 of the Code that they had reached agreement on the terms of the Drax Offer, to be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Drax Scheme").

The Drax Scheme was conditional, amongst other things, on Drax Bidco's Court Meeting being held on or before the 22nd day after 7 May 2025, being the originally expected date of the Court Meeting (or such later date as may be agreed by Drax Bidco and HEIT with the consent of the Panel and, if required that the Court may allow) (the "Mini Long Stop Date"). No such later date was agreed between Drax Bidco and HEIT and the Mini Long Stop Date therefore was 29 May 2025.

Condition 2(a)(ii), as set out in the Drax Scheme, was not satisfied on or before 29 May 2025. Drax Bidco has invoked the Mini Long Stop Date condition of the Drax Scheme and, as such, the Drax Scheme has lapsed, with effect from this announcement.

This announcement should be read in conjunction with the scheme document published or otherwise made available to HEIT Shareholders on 15 April 2025 (the "Scheme Document"). Capitalised terms in this announcement, unless otherwise defined have the same meanings as set out in Part X of the Scheme Document.



Enquiries:



Drax and Drax Bidco



Enquiries:

Drax Investor Relations:

Mark Strafford

[e-mail]

[phone]



Chris Simpson

[e-mail]

[phone]



Media:

Drax External Communications:

Chris Mostyn

[e-mail]

[phone]





J.P. Morgan Cazenove (Financial Adviser and Corporate Broker to Drax and Drax Bidco)

[phone]

Robert Constant

James Robinson

Alia Malik

Rupert Budge

Edward Hatter

[craigso] 21/5/2025 06:31:18

The Takeover Code surely prohibits playing silly games like that.

I do wonder why Drax accepted the auction and then pulled out. Either their own Board (or major shareholders via the Chair) must have made it clear they wouldn't support a bidding war. Otherwise why not just say that their 88p bid was final?

[nickrl] 20/5/2025 19:58:39

Could Foresight withdraw their bid or at least negotiate it back down I wonder?

[craigso] 20/5/2025 17:42:02

Well well well...

Hopefully the excuse of "capital discipline" is just cover for "we're talking to Gresham House instead of getting into a bidding war".

[craigso] 20/5/2025 09:12:46

I wonder how crazy it might get on Wednesday evening.

Foresight originally proposed 84p. Drax came back formally with 88p. Foresight went to 92p.

To buy today, it looks like I'd need to pay 97.5p after stamp duty.

Worst case scenario is obviously 92p, although Drax wouldn't have accepted the auction without the intention of making one more bid at least. Best case scenario 100-something?

At some point the bidders IRRs don't work anymore. But Drax in particular can maybe consider an extra £10-20m as a worthwhile strategic premium to pay to diversify their portfolio.

[williamcooper104] 16/5/2025 22:02:31

Wow Now let's do same for GRID

[rambutan2] 16/5/2025 21:51:05

Well well well, and now for something completely different...

On the basis that neither offeror has declared its offer final, such that either offer may be increased or otherwise revised, a competitive situation continues to exist for the purposes of Rule 32.5 of the Takeover Code (the "Code").

In order to provide an orderly framework for the resolution of this competitive situation, and in accordance with Rule 32.5 of the Code, the Panel Executive has, at the request of the parties, established an auction procedure. Each of the parties has accepted these terms and accordingly the auction procedure set out below shall be applied (and the procedure set out in Appendix 8 of the Code shall not apply).

The auction procedure will consist of a maximum of five rounds which will all take place on the evening of Wednesday 21 May 2025. In the first round, either offeror may make an increased bid. If the auction procedure has not concluded in the first round (which it will if no increased bid is made in the first round), there will be up to three further rounds, in which an offeror will be eligible to make a bid only if the other offeror made an increased bid in the immediately preceding round. If the auction procedure has not concluded after these three further rounds (which it will if no increased bid is made in a round), there will be a fifth and final round, in which both offerors may make an increased bid.

[craigso] 15/5/2025 11:40:44

Since I'm now backing GRID as the next M&A play in this space, I'm glad that nothing is happening here. ;)

[craigso] 10/5/2025 07:13:24

Court approval is scheduled for 30 May, with the transaction completing on 17 June.

Drax (or anybody else) only has a week or two left to counter-bid.

[solarno lopez] 06/5/2025 11:03:38

Thanks and I continue to hold

[craigso] 06/5/2025 10:48:28

There hasn't really been any significant volume since the Foresight counter-bid which sent the share price to 96p. That was before Easter.

I suppose that there ought to be higher volume as some hedge funds took their money off the table at 96p and others bet on another counter-bid by Drax. But perhaps there isn't enough buying interest for anybody with a significant position to sell out.

Even if a counter-bid comes, it wouldn't be much higher than 100p or so. Far more upside in GRID and other renewables / infrastructure ITs for us mortals with tradeable positions.

And as much as I love the short-term upside of M&A across the sector, you also have to assume that parties interested in BESS such as Drax might wait and see where Chinese battery prices end up with the US market effectively closed to them...

[solarno lopez] 06/5/2025 10:10:37

Are we still awaiting Drax's final offer ?

[craffert] 30/4/2025 13:59:13

Good points guys...I'm researching USP as a possibility. Please share other IT's and REIT's that have an unwarranted disconnect between NAV and share price

[williamcooper104] 30/4/2025 08:51:53

HOME was a pure fraud, but red book property values on most REITs are this cycle mostly right, so the discounts are usually real

[craigso] 30/4/2025 08:39:35

Sadly, opportunities like HEIT are rare. Especially the fact that HEIT was openly for sale, but the stock market (and many commenters on here) refused to believe the NAV would be a good reference for the final price.

But investment trusts in general are under-researched. So the trick is finding discounted ITs where the NAV is legitimate and achievable, and avoiding the ones where the NAV ended up being a scam (Home REIT, DGI9, etc.). You probably don't need to stray far from the renewables / infrastructure space to find ITs whose discount is simply too wide but the NAVs are realistic.

And it doesn't hurt to keep cash on the sidelines until Trump does something else stupid and you can buy your targets at an even larger discount.

[craffert] 29/4/2025 21:44:27

Buy nothing until something comes along where the odds of success are massively stacked in your favour, loke HEIT. For now I'm just sitting on cash. I'm researching BIG as an opportunity as the odds of making money look interesting after the crash, bang, wallop there

[solarno lopez] 21/4/2025 10:47:34

So what should we buy next craffert ?

[craffert] 21/4/2025 10:40:51

Told y'all to hang in for some easy money from 40p...we are now in dreamland territory.

[craigso] 17/4/2025 16:37:17

I definitely didn't expect Foresight to counter-bid, especially with so much uncertainty about the economy.

But like others, my HEIT proceeds have earned a nice return elsewhere anyhow. So I'm not sad to have sold out already.

The market obviously expects another counter-bid. But surely at some point GRID comes into play and there's more upside left there for sure...

GSF is also starting to receive ITC credits. All quite bullish for this sector, after a couple of miserable years...

[roystoncropper] 17/4/2025 09:28:39

Well done to those still holding. I'm happy with my switch from HEIT to BRWM when BRWM was on sale.

[solarno lopez] 17/4/2025 09:20:38

Looks like it especially with the Drax available fire power .

[nickelmer] 17/4/2025 08:26:58

Market price above the offer, expecting yet another higher bid?

[williamcooper104] 16/4/2025 19:13:50

I bailed out too Very decent quick trade Alas still bag holding GSF - but its doing a little better

[hindsight] 16/4/2025 18:05:07

Not over yet, Foresight bid again

[roystoncropper] 08/4/2025 16:22:54

Sold out at 88p and bought BRWM close to yesterday's low. Not enough upside here to sit on it and miss out on opportunities elsewhere.