HEIT shares soar 24% on acquisition bid from Foresight

Shares of Harmony Energy Income Trust Plc (HEIT)- an investment company that invests in battery energy storage systems in the UK surged as much as 24.2% to 81p on Monday, marking their highest point since December 2023.

The jump followed the announcement that investment manager Foresight Group has proposed an all-cash acquisition bid for the London-listed battery energy storage firm, valuing it at approximately £190.8 million ($246.91 million).

The news of the potential acquisition sent HEIT shares up around 22% year-to-date, including the session’s gains, as investors welcomed the premium offer, viewing it as a positive step toward maximising shareholder value.

Foresight’s offer at a 29% premium

Foresight’s bid of 84 pence per share represents a 29% premium to HEIT’s closing price of 65.2 pence on Friday.

Additionally, the offer marks a 76% premium compared to HEIT’s closing price of 47.8 pence on May 29, 2024, when the company announced its asset sale process.

Foresight is an investment manager in real assets and provides capital for growth with extensive experience of investing in energy transition, renewables and infrastructure projects, and is an experienced and knowledgeable investor in UK battery storage assets.

“Foresight 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,” said a joint statement.

HEIT board signals support

In response to the offer, HEIT’s board has indicated that it would be “minded to recommend” the proposal to shareholders if Foresight formalizes its bid.

The board emphasized that, after careful consideration and consultation with advisers, the offer delivers a superior outcome for shareholders compared to the ongoing asset sale process.

The company’s statement acknowledged the substantial progress made in selling its entire portfolio to a third party.

However, the board believes that Foresight’s proposal provides greater value and certainty for investors.

Acquisition bid caps a tumultuous year for HEIT

In December, Harmony Energy Income Trust (HEIT) revealed it had entered the final stage of exclusive negotiations with an unnamed preferred bidder for the sale of its entire portfolio of battery energy storage system (BESS) assets.

The news capped off a turbulent year for HEIT and the Harmony Energy development company.

The year began with a stark announcement in February, as HEIT reported a significant decline in revenues for the year ending 31 October 2023, attributed to a “weak revenue environment for BESS assets.”

This concern was echoed by rival BESS investment firm Gresham House Energy Storage Fund.

In an effort to reassure investors, HEIT forecasted “attractive returns” despite the challenging UK battery storage market.

However, in May, the company cancelled its first-quarter dividend for 2024 and appointed JLL to explore offers for some or all of its assets, aiming to demonstrate that the fund was undervalued.

At the time, HEIT cited the sale as a strategy to “maximize profits and highlight the continuing disconnect with the share price,” which had plunged by 57% from the previous year.

By August, HEIT reported strong interest from potential buyers and later announced plans to sell its entire UK portfolio.