REG - Foresight Group LLP Harmony Energy Inc. - Offer for Harmony Energy Income Trust Plc
16/04/2025 17:15
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RNS Number : 3452F Foresight Group LLP 16 April 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.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
16 April 2025
RECOMMENDED CASH ACQUISITION
of
Harmony Energy Income Trust plc ("HEIT")
by
PP Bidco Limited ("BidCo")
(a newly formed company indirectly and wholly controlled by two funds within
the portfolio of funds managed by Foresight Group LLP)
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of BidCo and HEIT are pleased to
announce that they have reached agreement on the terms of a recommended cash
acquisition pursuant to which BidCo shall acquire the entire issued and to be
issued ordinary share capital of HEIT (the "Acquisition"). The Acquisition is
intended to be effected by means of a scheme of arrangement under Part 26 of
the Companies Act.
· Under the terms of the Acquisition, HEIT
Shareholders will be entitled to receive:
for each Scheme Share held: 92.4 pence in cash.
· The Acquisition Price represents:
· a 5 per cent. premium to the Drax Offer of 88.0 pence
per HEIT Share;
· a 42 per cent. premium to the Closing Price of 65.2
pence per HEIT Share on 14 March 2025 (being the last Business Day prior to
the start of the Offer Period); and
· a 94 per cent. premium to the Closing Price of 47.8
pence per HEIT Share on 29 May 2024 (being the last Business Day prior to the
date of the announcement of HEIT's Asset Sale process).
· The Acquisition values the entire issued and to
be issued ordinary share capital of HEIT at approximately £209.9 million.
Transaction Overview
· All-cash offer to acquire HEIT by BidCo, which
currently is indirectly controlled by Foresight Energy Infrastructure Partners
II S.C.Sp ("FEIP II"). The HEIT Board is unanimously recommending the
Acquisition.
· BidCo has received irrevocable undertakings and
a non-binding letter of intent in respect of a total of 125,994,915 HEIT
Shares representing, in aggregate, approximately 55.47 per cent. of the
ordinary share capital of HEIT in issue on the Latest Practicable Date.
· Ahead of completion of the Acquisition,
Blackmead Infrastructure Limited ("Blackmead") will also make an equity
investment in BidCo. Blackmead is a wholly owned subsidiary of Averon Park.
Averon Park's principal activity is to acquire and invest in unquoted UK
trading companies.
· Foresight Group LLP ("Foresight") is a leading
investment manager in real assets and is an experienced and knowledgeable
investor, through its many different funds, in UK and European battery storage
assets. Foresight acts as portfolio manager to FEIP II's alternative
investment fund manager in respect of FEIP II and is the discretionary
investment manager of Averon Park.
· As detailed above, the Acquisition is being
made by BidCo and not by Foresight, or its parent company, Foresight Group
Holdings Limited.
· The Foresight Funds recognise HEIT's leading
platform and consider HEIT's BESS portfolio to be highly complementary with
their strategic mandates and Foresight's existing managed investments in
renewable energy and storage.
· As previously announced, HEIT had made
substantial progress through its Asset Sale process towards the conclusion of
a definitive agreement to sell its entire portfolio to Drax. On 25 March 2025,
following the publication on 17 March 2025 of a joint statement by the HEIT
Board and Foresight (on behalf of one or more funds managed by Foresight and
its affiliates) regarding a possible cash offer for HEIT, HEIT and Drax Bidco
announced the Drax Offer and a scheme document was subsequently published in
respect of the Drax Offer on 15 April 2025.
· However, having carefully considered the terms
of the Acquisition with its advisers, the HEIT Board has concluded that the
Acquisition, on balance, delivers a superior outcome in terms of both price
and deliverability for HEIT Shareholders than the potential transaction with
Drax under the Asset Sale process and in terms of price for HEIT Shareholders
than the Drax Offer. Further, the HEIT Board believes the Acquisition provides
HEIT Shareholders with the opportunity to realise the value of their holdings,
in cash, at an attractive value which is a significant premium to the share
price on 14 March 2025, particularly when viewed in the context of the
substantial discount to net asset values at which companies in the UK BESS
investment trust sector currently trade.
· The Acquisition represents a superior offer to
the Drax Offer in terms of cash price per share to HEIT Shareholders.
· Therefore, and for the reasons set out in
paragraph 5 (Background to and reasons for the HEIT Board's recommendation),
after careful consideration together with its financial adviser, the HEIT
Board has concluded that the Acquisition is in the best interests of HEIT
Shareholders and HEIT as a whole. Consequently, the HEIT Board intends to
adjourn the Drax Offer Shareholder Meetings. Accordingly, the HEIT Board urges
HEIT Shareholders to take no action in respect of the Drax Offer.
HEIT Recommendation
· The HEIT Directors, who have been so advised by
Panmure Liberum as to the financial terms of the Acquisition, consider the
terms of the Acquisition to be fair and reasonable. In providing its advice to
the HEIT Directors, Panmure Liberum has taken into account the commercial
assessments of the HEIT Directors. Panmure Liberum is providing independent
financial advice to the HEIT Directors for the purposes of Rule 3 of the
Takeover Code.
· Accordingly, the HEIT Directors recommend
unanimously that HEIT Shareholders vote in favour of the Scheme at the Court
Meeting and the resolutions to be proposed at the General Meeting.
· In light of their recommendation of the
Acquisition, the HEIT Board has unanimously withdrawn its recommendation of
the Drax Offer and intends to adjourn the Drax Offer Shareholder Meetings
which are due to be held on 7 May 2025. A separate announcement will be made
by HEIT in this regard. The HEIT Board urges HEIT Shareholders to take no
action in relation to the Drax Offer. It is noted that the HEIT Directors (who
hold 101,116 HEIT Shares representing, in aggregate, approximately 0.04 per
cent. of the ordinary share capital of HEIT in issue on 15 April 2025, being
the latest practicable date prior to the date of this announcement ("Latest
Practicable Date")) have provided irrevocable undertakings to vote in favour
of the Drax Offer, which remain binding in the event of a higher competing
offer as further described in the Drax 2.7 Announcement and therefore are
unable to provide irrevocable undertakings in respect of the Scheme.
Irrevocable Undertakings and Letter of Intent
· Harmony Energy Limited, as well as certain
directors of Harmony Energy Limited and Harmony Energy Advisors, have given
irrevocable undertakings to vote, or procure a vote, in favour of the Scheme
at the Court Meeting and the resolutions to be proposed at the General Meeting
in respect of a total of 38,578,863 HEIT Shares representing, in aggregate,
approximately 17.0 per cent. of the issued ordinary share capital of HEIT on
the Latest Practicable Date. These irrevocable undertakings remain binding in
the event of a higher competing offer for HEIT.
· In addition, BidCo has received irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting, and the
resolutions to be proposed at the General Meeting, from:
· PrimeStone Capital LLP in respect of a total of
25,986,450 HEIT Shares representing, in aggregate, approximately 11.44 per
cent. of the ordinary share capital of HEIT in issue on the Latest Practicable
Date;
· Newton Investment Management Limited in respect of a
total of 7,151,972 HEIT Shares representing, in aggregate, approximately 3.15
per cent. of the ordinary share capital of HEIT in issue on the Latest
Practicable Date;
· Nicholas Norman Cournoyer in respect of a total of
6,855,830 HEIT Shares representing, in aggregate, approximately 3.02 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date;
· Church House Investments Limited in respect of a
total of 3,400,000 HEIT Shares representing, in aggregate, approximately 1.50
per cent. of the ordinary share capital of HEIT in issue on the Latest
Practicable Date;
· Trinitybridge Limited in respect of a total of
2,609,923 HEIT Shares representing, in aggregate, approximately 1.15 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date;
· Dowgate Wealth Limited in respect of a total of
2,546,000 HEIT Shares representing, in aggregate, approximately 1.12 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date;
and
· Forest Nominees Limited in respect of a total of
155,000 HEIT Shares representing, in aggregate, approximately 0.07 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date.
These irrevocable undertakings remain binding in the event of a higher
competing offer for HEIT unless such competing offer for HEIT represents a
value per HEIT Share of not less than 5 per cent. above the Acquisition Price,
and BidCo does not increase the consideration offered under the Scheme to an
amount which is equal to or higher than the consideration offered by the third
party competing offeror either within ten days of the date of the third
party's announcement or offer, or prior to the date of the Court Meeting and
the General Meeting (whichever is the earliest).
· BidCo has therefore received irrevocable
undertakings in respect of a total of 87,284,038 HEIT Shares representing, in
aggregate, approximately 38.43 per cent. of the ordinary share capital of HEIT
in issue on the Latest Practicable Date.
· BidCo has also received a non-binding letter of
intent to vote in favour of the Scheme at the Court Meeting, and the
resolutions to be proposed at the General Meeting, from Schroder & Co
Limited in respect of a total of 38,710,877 HEIT Shares representing, in
aggregate, approximately 17.04 per cent. of the ordinary share capital of HEIT
in issue on the Latest Practicable Date, subject to the irrevocable
undertaking given by Schroder & Co Limited in respect of the Drax Offer
lapsing.
· Further details of these irrevocable
undertakings and the letter of intent are set out in Appendix III to this
announcement.
Structure, conditions and timetable
· It is intended that the Acquisition shall be
effected by means of a scheme of arrangement between HEIT and HEIT
Shareholders under Part 26 of the Companies Act, although BidCo reserves the
right to implement the Acquisition by means of a Takeover Offer (subject to
Panel consent and compliance with the Takeover Code).
· The Acquisition is conditional on the approval
of HEIT Shareholders and subject to the further Conditions and terms set out
in Appendix I to this announcement (which will be set out, in full, in the
Scheme Document).
· The Acquisition shall be put to HEIT
Shareholders at the Court Meeting and at the General Meeting. In order to
become Effective, the Scheme must be approved by a majority in number of the
HEIT Shareholders voting at the Court Meeting, either in person or by proxy,
representing at least 75 per cent. in value of the HEIT Shares voted. In
addition, a special resolution implementing the Scheme must be passed by HEIT
Shareholders representing at least 75 per cent. of votes cast at the General
Meeting. Following the Court Meeting, the Scheme must also be sanctioned by
the Court.
· For the purposes of Rule 29.1(d) of the
Takeover Code, a valuation of HEIT's Portfolio will be included in the Scheme
Document (or, if applicable, the offer document).
· The Scheme Document, containing further
information about the Acquisition and notices of the Court Meeting and the
General Meeting will be published as soon as reasonably practicable, and, in
any event, within 28 days of this announcement.
· If, on or after the date of this announcement
and on or prior to the Effective Date, any dividend, distribution, or other
return of value is declared, made, or paid, or becomes payable by HEIT, BidCo
reserves the right to reduce the Acquisition Price by an amount up to the
amount of such dividend, distribution, or other return of value in which case
any references to the Acquisition Price will be deemed to be a reference to
the Acquisition Price as so reduced.
· The Acquisition is currently expected to
complete during the second quarter of 2025, subject to the satisfaction or
waiver of the Conditions. An expected timetable of key events relating to the
Acquisition will be set out in the Scheme Document.
Commenting on the Acquisition, Norman Crighton, Chairman of HEIT, said:
"Since its launch in 2021, HEIT has grown its portfolio of BESS assets in the
UK, today consisting of eight 100 per cent. operational projects (790.8 MWh /
395.4 MW) across Great Britain. Despite positive progress in this regard,
significant headwinds have curtailed HEIT's revenue growth opportunities,
resulting in HEIT trading at a material and persistent discount to NAV.
The HEIT Board believes that value to HEIT Shareholders will be maximised
through the terms of the Acquisition, with the Acquisition Price being at a
premium to the previously announced Drax Offer. 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."
Commenting on the Acquisition, Richard Thompson, Partner at Foresight, said:
"We believe that HEIT will be a highly complementary addition to our existing
managed portfolio of high-quality UK battery storage assets and other
investments in renewable energy, storage and grid infrastructure. Our offer
provides meaningful value for HEIT shareholders. We encourage all HEIT
shareholders to support our offer, in order to receive the investment
liquidity and cash value for their shares we are offering today."
This summary should be read in conjunction with the full text of this
announcement. The Acquisition shall be subject to the Conditions and further
terms set out in Appendix I to this announcement and to the full terms and
conditions which shall be set out in the Scheme Document. Appendix II to
this announcement contains the sources of information and bases of
calculations of certain information contained in this announcement,
Appendix III contains a summary of the irrevocable undertakings received in
relation to this Acquisition and Appendix IV contains definitions of
certain expressions used in this summary and in this announcement.
Enquiries:
Foresight
Richard Thompson +44 20 3667 8100
Ben Williams
Anouska Morjaria
Matt Hammond
H-Advisors Maitland (PR Advisers to BidCo, FEIP II, Averon Park and Foresight)
Sam Turvey +44 782 783 6246
Genevieve Ryan +44 781 710 5562
Daisy Padovan +44 782 586 1759
Sam Cartwright +44 782 725 4561
RBC Capital Markets (Financial Adviser to BidCo and Foresight)
Mark Rushton +44 20 7653 4000
Ross Board
Matthew Coakes
Samuel Jackson
Harmony Energy Income Trust plc
Norman Crighton, Chairman via Panmure Liberum Limited
Panmure Liberum Limited (Sole Financial Adviser and Rule 3 Adviser and Joint
Broker to HEIT)
Corporate Finance: +44 20 3100 2222
Chris Clarke
Darren Vickers
Will King
M&A:
Tim Medak
Stifel Nicolaus Europe Limited (Joint Broker to HEIT)
Mark Young +44 20 7710 7600
Edward Gibson-Watt
Rajpal Padam
Mark Whitfeld
Camarco (PR Advisers to HEIT)
Eddie Livingstone-Learmonth +44 20 3757 4980
Andrew Turner
Gowling WLG (UK) LLP is retained as legal adviser to HEIT.
Ashurst LLP is retained as legal adviser to Foresight and BidCo.
Inside Information
This announcement contains inside information as defined in the Market Abuse
Regulation. Upon the publication of this announcement via a Regulatory
Information Service, such inside information will be considered to be in the
public domain.
The person responsible for arranging the release of this announcement on
behalf of HEIT is Susan Fadil of the Company Secretary, JTC (UK) Limited. The
LEI of HEIT is 254900O3XI3CJNTKR453.
Important Notices
RBC Europe Limited (trading as RBC Capital Markets), which is authorised by
the Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United Kingdom, is
acting exclusively as financial adviser to BidCo and Foresight and no one else
in connection with the Acquisition and will not be responsible to anyone other
than BidCo and Foresight for providing the protections afforded to its clients
nor for providing advice in relation to the matters referred to in this
announcement. Neither RBC Europe Limited nor any of its affiliates, directors
or employees owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, consequential, whether in contract, tort, in
delict, under statute or otherwise) to any person who is not a client of RBC
Europe Limited in connection with the Acquisition or any matter referred to
herein.
Panmure Liberum Limited ("Panmure Liberum"), which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively as financial adviser, Rule 3 adviser and joint broker to HEIT and
no one else in connection with the Acquisition and the matters and
arrangements set out in this announcement. Panmure Liberum will not regard any
other person as its client in relation to the Acquisition or any other matter
or arrangement set out in this announcement and will not be responsible to
anyone other than HEIT for providing the protections afforded to clients of
Panmure Liberum, nor for providing advice in relation to the Acquisition or
any other matter or arrangement referred to in this announcement. Neither
Panmure Liberum nor any of its affiliates (nor their respective directors,
officers, employees or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, consequential, whether
in contract, in tort, in delict, under statute or otherwise) to any person who
is not a client of Panmure Liberum in connection with the Acquisition, this
announcement, any statement contained herein or otherwise. No representation
or warranty, express or implied, is made by Panmure Liberum as to the contents
of this announcement.
Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively as joint broker to HEIT and no one else in connection with the
Acquisition and the matters and arrangements set out in this announcement.
Stifel will not regard any other person as its client in relation to the
Acquisition or any other matter or arrangement set out in this announcement
and will not be responsible to anyone other than HEIT for providing the
protections afforded to clients of Stifel, nor for providing advice in
relation to the Acquisition or any other matter or arrangement referred to in
this announcement. Neither Stifel nor any of its affiliates (nor their
respective directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
consequential, whether in contract, in tort, in delict, under statute or
otherwise) to any person who is not a client of Stifel in connection with the
Acquisition, this announcement, any statement contained herein or otherwise.
No representation or warranty, express or implied, is made by Stifel as to the
contents of this announcement.
This announcement is for information purposes only and is not intended to and
does not constitute, or form part of, an offer to sell or an invitation to
purchase any securities or the solicitation of an offer to buy, otherwise
acquire, subscribe for, sell or otherwise dispose of any securities, pursuant
to the Acquisition or otherwise, nor shall there be any purchase, sale,
issuance or exchange of securities or such solicitation in any jurisdiction in
which such offer, invitation, solicitation, purchase, sale, issuance or
exchange is unlawful.
The Acquisition shall be made solely by means of the Scheme Document (or, if
the Acquisition is implemented by way of a Takeover Offer, any document by
which the Takeover Offer is made) which, together with the Forms of Proxy (or
forms of acceptance, if applicable), shall contain the full terms and
conditions of the Acquisition, including details of how to vote in respect of
the resolutions proposed in connection with the Acquisition. Any vote,
approval, decision in respect of, or other response to, the Acquisition should
be made only on the basis of the information contained in the Scheme Document
(or if the Acquisition is to be implemented by way of a Takeover Offer, the
offer document).
The statements contained In this announcement are made as at the date of this
announcement, unless some other time is specified in relation to them, and the
release of this announcement shall not give rise to any implication that there
has been no change in the facts set out in this announcement since such date.
This announcement has been prepared for the purpose of complying with English
law, the Takeover Code, the Market Abuse Regulation and the Disclosure
Guidance and Transparency Rules, and the information disclosed may not be the
same as that which would have been disclosed if this announcement had been
prepared in accordance with the laws of any other jurisdictions.
HEIT and BidCo shall prepare the Scheme Document (or if the Acquisition is to
be implemented by way of a Takeover Offer, the offer document) to be
distributed to HEIT Shareholders. HEIT Shareholders should not make any
investment decision in relation to the Acquisition except on the basis of the
Scheme Document (or if the Acquisition is to be implemented by way of a
Takeover Offer, the offer document). HEIT and BidCo urge HEIT Shareholders to
read the Scheme Document in full when it becomes available because it shall
contain important information relating to the Acquisition.
This announcement does not constitute a prospectus or prospectus equivalent
document.
No person should construe the contents of this announcement as legal,
financial or tax advice. If you are in any doubt about the contents of this
announcement or the action you should take, you are recommended to seek your
own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or from an independent financial adviser duly
authorised under FSMA if you are resident in the United Kingdom, or another
appropriately authorised independent financial adviser, if you are in a
territory outside the United Kingdom.
Overseas Shareholders
The release, publication or distribution of this announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by the
laws and/or regulations of those jurisdictions. Persons into whose possession
this announcement comes who are not resident in the United Kingdom or who are
subject to the laws and/or regulations of any jurisdiction other than the
United Kingdom should inform themselves of, and observe, any such applicable
laws and/or regulations in their jurisdiction. In particular, the ability of
persons who are not resident in the United Kingdom to vote their HEIT Shares
with respect to the Scheme at the Court Meeting or the Resolution(s) at the
General Meeting, or to appoint another person as proxy to vote at the Court
Meeting or the General Meeting on their behalf, may be affected by the laws of
the relevant jurisdiction in which they are located. Further details in
relation to Overseas Shareholders will be contained in the Scheme Document.
Any failure to comply with any such restrictions may constitute a violation of
the securities laws of any such jurisdiction. To the fullest extent permitted
by applicable law, the companies and persons involved in the Acquisition
disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by BidCo or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition shall not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Accordingly, copies
of this announcement and all documents relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition (including
custodians, nominees and trustees) must not mail or otherwise distribute or
send them in, into or from such jurisdictions where to do so would violate the
laws in that jurisdiction. If the Acquisition is implemented by a Takeover
Offer (unless otherwise permitted by applicable law or regulation), the
Takeover Offer may not be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including, without
limitation, facsimile, email or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or any facility of a national
state or other securities exchange, of any Restricted Jurisdiction and the
Takeover Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities or from or within any Restricted Jurisdiction.
The Acquisition shall be subject to English law and the jurisdiction of the
Court, and, among other things, the applicable requirements of the Takeover
Code, the Panel, the London Stock Exchange, the Financial Conduct Authority
and the Registrar of Companies.
Additional information for investors in the United States
The Acquisition relates to shares of an English company admitted to trading on
the Specialist Fund Segment of the London Stock Exchange and is proposed to be
effected by means of a scheme of arrangement under Part 26 of the Companies
Act which will be governed by English law. A transaction effected by means of
a scheme of arrangement is not subject to the tender offer rules or the proxy
solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the requirements of United States tender offer and proxy
solicitation rules.
However, if BidCo were to elect to implement the Acquisition by means of a
Takeover Offer and determines to extend such Takeover Offer into the United
States, such Takeover Offer shall be made in compliance with all applicable
United States laws and regulations, including, without limitation, to the
extent applicable, Section 14(e) of the US Exchange Act and Regulation 14E
thereunder. Such a Takeover Offer would be made in the United States by BidCo
and no one else.
In accordance with normal United Kingdom practice and pursuant to Rule
14(e)-5(b) of the US Exchange Act (if applicable), BidCo or its nominees, or
its brokers (acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, shares or other securities of HEIT outside of
the US, other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn.
Were they to be made, these purchases or arrangements to purchase would occur
either in the open market at prevailing prices or in private transactions at
negotiated prices and would comply with applicable law, including the US
Exchange Act. Any information about such purchases or arrangements to purchase
shall be disclosed as required in the UK, shall be reported to a Regulatory
Information Service and shall be available on the London Stock Exchange
website at www.londonstockexchange.com.
The receipt of consideration by a US holder for the transfer of its HEIT
Shares pursuant to the Acquisition may have tax consequences in the US and
such consequences, if any, are not described herein. US holders of HEIT Shares
are urged to consult their independent professional adviser immediately
regarding the legal, tax and financial consequences of the Acquisition
applicable to them.
Neither the US Securities and Exchange Commission nor any securities
commission of any state or other jurisdiction of the United States has
approved the Acquisition, passed judgment upon the fairness or the merits of
the Acquisition, or passed judgment upon the completeness, adequacy or
accuracy of this announcement. Any representation to the contrary is a
criminal offence in the United States.
Financial information relating to HEIT included in this announcement and that
may be included in the Scheme Document (or, if the Acquisition is implemented
by way of a Takeover Offer, the offer document) or any other documents
relating to the Acquisition, has been or shall have been prepared in
accordance with accounting standards applicable in the United Kingdom and may
not be comparable to financial information of US companies or other companies
whose financial statements are prepared in accordance with generally accepted
accounting principles in the United States ("US GAAP"). US GAAP differs in
certain significant respects from accounting standards applicable in the
United Kingdom. None of the financial information in this announcement has
been audited in accordance with auditing standards generally accepted in the
United States or the auditing standards of the Public Company Accounting
Oversight Board (United States).
Each of BidCo and HEIT is organised under the laws of England and Wales. Some
or all of the officers and directors of BidCo and HEIT, respectively, are
residents of countries other than the United States. In addition, all of the
assets of BidCo and HEIT are located outside the United States. As a result,
it may be difficult for US holders of HEIT Shares to effect service of process
within the United States upon BidCo or HEIT or their respective officers or
directors or to enforce against them a judgment of a US court predicated upon
the federal or state securities laws of the United States, including judgments
based upon the civil liability provisions of the US federal securities laws.
US shareholders of HEIT may not be able to sue a non-US company or its
officers or directors in a non-US court for violations of US securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or judgment.
Forward looking statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by HEIT, BidCo, any member of the Wider BidCo Group or
any member of the Wider HEIT Group contain statements which are, or may be
deemed to be, "forward looking statements" about BidCo, HEIT, the Wider BidCo
Group and/or the Wider HEIT Group. Such forward looking statements are
prospective in nature and are not based on historical facts, but rather on
current expectations and on numerous assumptions regarding the business
strategies and the environment in which HEIT, BidCo or any member of the Wider
BidCo Group or any member of the Wider HEIT Group shall operate in the future
and are subject to risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by those statements.
All statements other than statements of historical facts included in this
announcement may be forward-looking statements. In some cases, these forward
looking statements can be identified by the use of forward looking
terminology, including the terms "believes", "estimates", "will look to",
"would look to", "plans", "prepares", "anticipates", "expects", "is expected
to", "is subject to", "budget", "scheduled", "forecasts", "synergy",
"strategy", "goal", "cost-saving", "projects" "intends", "may", "will",
"shall" or "should" or their negatives or other variations or comparable
terminology. Forward-looking statements may include, but are not limited to,
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of BidCo's,
HEIT's, any member of the Wider BidCo Group's or any member of the Wider HEIT
Group's operations and potential synergies resulting from the Acquisition; and
(iii) the effects of global economic conditions and governmental regulation on
BidCo's, HEIT's, any member of the Wider BidCo Group's or any member of the
Wider HEIT Group's business.
By their nature, forward-looking statements involve risks and uncertainties
and are made based on certain key assumptions, because they relate to events
and depend on circumstances that shall occur in the future. Many factors could
cause actual results to differ materially from those projected or implied in
any forward-looking statements, including but not limited to the satisfaction
of or failure to satisfy all or any of the conditions to the Acquisition, as
well as additional factors, such as changes in the global, political,
economic, business, competitive, market and regulatory forces, future exchange
and interest rates, changes in tax rates, future business combinations or
disposals, and any epidemic, pandemic or disease outbreak. If any one or more
of these risks or uncertainties materialises or if any one or more of the
assumptions prove incorrect, actual results may differ materially from those
expected, estimated or projected. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the forward-looking
statements. Such forward looking statements should therefore be construed in
the light of such factors.
Neither HEIT nor BidCo nor any member of the Wider BidCo Group, nor any member
of the Wider HEIT Group nor any of their respective associates or directors,
officers, members or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in this announcement shall actually occur. Given
these risks and uncertainties, potential investors should not place any
reliance on forward looking statements.
The forward-looking statements speak only at the date of this announcement.
All subsequent oral or written forward-looking statements attributable to
BidCo, HEIT, any member of the Wider BidCo Group or any member of the Wider
HEIT Group, or any of their respective associates, members, directors,
officers, employees or advisers or any persons acting on their behalf, are
expressly qualified in their entirety by the cautionary statement above.
HEIT, BidCo, the Wider HEIT Group and the Wider BidCo Group expressly disclaim
any obligation to update or revise such statements (or any other statements)
contained in this announcement other than as required by law or by the rules
of any competent regulatory authority, whether as a result of new information,
future events or otherwise.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified financial benefit statement for any period and no
statement in this announcement should be interpreted to mean that earnings or
earnings per share for BidCo, the Wider BidCo Group or HEIT, as appropriate,
for the current or future financial years would necessarily match or exceed
the historical published earnings or earnings per share for BidCo, the Wider
BidCo Group or HEIT, as appropriate.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 p.m. (London time) on the business day following the date of
the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they shall
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk/ (http://www.thetakeoverpanel.org.uk/) ,
including details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified. You should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by HEIT Shareholders, persons with information rights and other
relevant persons for the receipt of communications from HEIT may be provided
to BidCo during the Offer Period as requested under Section 4 of Appendix 4 of
the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Publication on website and availability of hard copies
A copy of this announcement shall be made available, free of charge, subject
to certain restrictions relating to persons resident in Restricted
Jurisdictions on BidCo's website at www.foresight.group/heit and on HEIT's
website at www.heitp.co.uk/investors/heit-offer/ by no later than 12.00 noon
(London time) on the first Business Day after the date of this announcement.
For the avoidance of doubt, the contents of these websites and any websites
accessible from hyperlinks on these websites are not incorporated into and do
not form part of this announcement.
HEIT Shareholders and persons with information rights may request a hard copy
of this announcement by contacting HEIT's registrar, Computershare Investor
Services PLC, by writing to them at The Pavilions, Bridgwater Road, Bristol
BS99 6ZZ or by calling them on +44 (0)370 703 6003 during business hours (9.30
a.m. to 5.30 p.m. (London time) Monday to Friday excluding public holidays in
England and Wales). Calls are charged at the standard geographical rate and
will vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Please note that Computershare cannot provide
any financial, legal or tax advice. Calls may be recorded and monitored for
security and training purposes.
HEIT Shareholders and persons with information rights may also request that
all future documents, announcements and information to be sent to them in
relation to the Acquisition should be sent to them in hard copy form, again by
writing to the address set out above or by calling the telephone number above.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
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
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
16 April 2025
RECOMMENDED CASH ACQUISITION
for
Harmony Energy Income Trust plc ("HEIT")
by
PP Bidco Limited ("BidCo")
(a newly formed company indirectly and wholly controlled by two funds within
the portfolio of funds managed by Foresight Group LLP)
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The boards of BidCo and HEIT are pleased to announce that they have reached
agreement on the terms of a recommended cash acquisition pursuant to which
BidCo shall acquire the entire issued and to be issued ordinary share capital
of HEIT (the "Acquisition"). The Acquisition is intended to be effected by
means of a scheme of arrangement under Part 26 of the Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which shall be subject to the Conditions
and further terms set out in Appendix I to this announcement and to be set
out in the Scheme Document, HEIT Shareholders shall be entitled to receive:
for each Scheme Share: 92.4 pence in cash.
The Acquisition Price represents:
· a 5 per cent. premium to the Drax Offer of 88.0 pence
per HEIT Share;
· a 42 per cent. premium to the Closing Price of 65.2
pence per HEIT Share on 14 March 2025 (being the last Business Day prior to
the start of the Offer Period); and
· a 94 per cent. premium to the Closing Price of 47.8
pence per HEIT Share on 29 May 2024 (being the last Business Day prior to the
date of the announcement of HEIT's Asset Sale process).
The Acquisition values the entire issued and to be issued ordinary share
capital of HEIT at approximately £209.9 million.
If, on or after the date of this announcement and on or prior to the Effective
Date, any dividend, distribution, or other return of value is declared, made,
or paid, or becomes payable by HEIT, BidCo reserves the right to reduce the
Acquisition Price by an amount up to the amount of such dividend,
distribution, or other return of value in which case any references to the
Acquisition Price will be deemed to be a reference to the Acquisition Price as
so reduced. In such circumstances, HEIT Shareholders shall be entitled to
retain any such dividend, distribution, or other return of value declared,
made, or paid.
The Scheme Document containing further information about the Acquisition and
the Scheme and notices of the Court Meeting and the General Meeting will be
published as soon as reasonably practicable and, in any event, within 28 days
of this announcement, unless BidCo and HEIT otherwise agree, and the Panel
consents, to a later date. It is expected that the Court Meeting and the
General Meeting will be held as soon as practicable thereafter, giving the
required notice periods, and that, subject to the satisfaction or (where
relevant) waiver of the Conditions, the Scheme is expected to become Effective
during the second quarter of 2025.
BidCo reserves the right to elect (with the consent of the Panel and in
compliance with the Takeover Code) to implement the Acquisition by way of a
Takeover Offer for the HEIT Shares as an alternative to the Scheme.
3. Background to and reasons for the Acquisition
The Acquisition will be made by BidCo. At completion of the Acquisition, BidCo
will be controlled by FEIP II and Averon Park, which are both funds managed by
Foresight. Foresight is a leading investment manager in real assets and in
providing capital for growth with extensive experience, through its many
different funds, of investing in energy transition, renewables and
infrastructure projects, and is an experienced and knowledgeable investor
inter alia in UK and European battery storage assets.
Foresight has closely followed HEIT and its battery storage assets over a
number of years, and believes the management team and Board of HEIT has
established a high-quality portfolio of assets which fit well with Foresight's
existing managed portfolio of UK battery storage assets. In particular,
Foresight notes that HEIT operates the largest exclusively 2-hour duration
battery energy storage systems ("BESS") portfolio in Great Britain across its
eight projects. Foresight has actively monitored opportunities in the GB BESS
market and believes strongly that the Acquisition represents a scarce
opportunity to acquire a portfolio of assets which is highly complementary to
its other investment activities and offers immediate cash yield underpinned by
high quality technology choices and a robust operating track record. With a
longstanding, substantial portfolio of managed renewable energy assets in the
UK, Foresight considers that the rapid development of renewable energy
platforms in the GB energy market will further enhance the importance of BESS
within the industry, leading to a favourable shift in the market cycle and
providing material revenue and growth opportunities in the sector.
Acquisition by BidCo and its funding
The Acquisition will be made by BidCo, a newly formed company. At completion
of the Acquisition, BidCo will be controlled by FEIP II and Averon Park. FEIP
II invests in diversified and differentiated energy transition assets, and in
particular in assets which assist with eliminating bottlenecks to the energy
transition. Ahead of completion of the Acquisition, Blackmead, a wholly owned
subsidiary of Averon Park, will also make an equity investment in BidCo.
Averon Park's principal activity is to acquire and investment in unquoted UK
trading companies. The Foresight Funds recognise HEIT's leading platform and
consider HEIT's BESS portfolio to be highly complementary with the Foresight
Funds' strategic mandates and Foresight's existing managed investments in
renewable energy and storage. Further, the acquisition of HEIT enhances the
Foresight Funds' growth in the UK battery storage market, which is a core area
of investment for the Foresight Funds.
The Foresight Funds, with access to capital and the benefit of a long-term
investment approach, further believe HEIT's growth and development will be
best served as a private business under BidCo's ownership. This will allow it
to continue to deliver on its strategic objectives whilst enabling it to
respond to the ongoing structural changes in its industry in the medium and
long term.
4. Recommendation of the HEIT Board
The HEIT Directors, who have been so advised by Panmure Liberum as to the
financial terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing its advice to the HEIT Directors, Panmure
Liberum has taken into account the commercial assessments of the HEIT
Directors. Panmure Liberum is providing independent financial advice to the
HEIT Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, for the reasons set out below, the HEIT Directors recommend
unanimously that HEIT Shareholders vote in favour of the Scheme at the Court
Meeting and the Resolution(s) to be proposed at the General Meeting (or, in
the event that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of the Takeover Offer). In light of their
recommendation of the Acquisition, the HEIT Board has unanimously withdrawn
its recommendation of the Drax Offer and intends to adjourn the Drax Offer
Shareholder Meetings which are due to be held on 7 May 2025. A separate
announcement will be made by HEIT in this regard. The HEIT Board urges HEIT
Shareholders to take no action in relation to the Drax Offer.
It is noted that the HEIT Directors (who hold 101,116 HEIT Shares
representing, in aggregate, approximately 0.04 per cent. of the ordinary share
capital of HEIT in issue on the Latest Practicable Date) have provided
irrevocable undertakings to vote in favour of the Drax Offer, which remain
binding in the event of a higher competing offer as further described in the
Drax 2.7 Announcement and therefore are unable to provide irrevocable
undertakings in respect of the Scheme.
5. Background to and reasons for the HEIT Board's
recommendation
Background
HEIT was launched in November 2021 to invest in battery energy storage systems
("BESS") in Great Britain. HEIT, by way of a fundraising and issuance of
shares at IPO, acquired an initial portfolio of five BESS development projects
(the "Seed Portfolio") in accordance with HEIT's investment objective and
policy. HEIT sought to deliver to HEIT Shareholders an 8 per cent. per annum
quarterly dividend (based on the IPO issue price of 100p and once the
portfolio was fully operational) and an unlevered Net Asset Value total return
of 10 per cent. per annum over the medium to long-term.
HEIT's Seed Portfolio was acquired from Harmony Energy and, at the same time,
HEIT entered in a pipeline agreement giving it exclusive rights to acquire
further BESS projects from Harmony Energy. The first such project (Bumpers,
198 MWh / 99 MW) was acquired by HEIT in August 2022. In October 2022, HEIT
raised an additional £15 million to allow it to exercise its rights under the
pipeline agreement and acquire three additional assets. The new projects
increased HEIT's portfolio to nine BESS projects with a total capacity of
approximately 1GWh / 500MW. One of these projects, Rye Common (99MW) was
subsequently sold (pre-construction) in September 2023. The balance of the
portfolio was built out on a staggered basis, with the first project
commencing operations in November 2022. Following the completion of
construction of the final project in October 2024, HEIT's portfolio of fully
operational assets consists of eight 2-hour duration BESS projects totalling
790.8 MWh / 395.4 MW.
Performance since IPO
Despite positive progress on the construction of HEIT's portfolio, a more
challenging environment for BESS assets emerged through 2023 which impacted
revenue performance. This volatile environment led to a 4.5 per cent. fall in
the NAV per share as at 31 October 2023, driven predominantly by a reduction
in third party revenue assumptions. For the year ended 31 October 2023 ("FY
2023"), HEIT reported that actual revenues achieved had been below independent
forecasts and this variance in revenue predictability, coupled with higher
interest rates, negatively impacted the share price of HEIT.
BESS revenues for FY 2023 were markedly lower than revenue generated in the
same period in 2022. Whilst a reduction from the highs of 2022 was expected
and built into third party revenue forecasts, the scale and the speed of the
reduction exceeded market expectations. There were multiple drivers of this
reduction in revenue, both macro and sector-specific:
· Saturation of ancillary service markets. The high
rate of build-out of BESS in Great Britain led to saturation of ancillary
services and had driven clearing prices for such services to record low
levels. This was widely anticipated and HEIT positioned its 2-hour duration
portfolio specifically to protect against this event and take maximum
advantage of the inevitable shift by BESS towards "arbitrage" strategies:
wholesale market trading and the Balancing Mechanism ("BM").
· Reduction in wholesale power price volatility and
spreads. As a 2-hour duration portfolio, this is more relevant to HEIT than
ancillary services. Wholesale spreads narrowed in FY 2023 and the first
quarter of FY 2024 primarily due to a reduction in natural gas prices. In
addition, Great Britain was importing a large volume of energy from Europe
(via interconnectors) and high consumer prices had encouraged a material
reduction in consumer energy usage and demand.
· Implementation issues with National Grid ESO
(subsequently re-branded as "NESO") Open Balancing Platform ("OBP"). Another
key factor in revenue weakness was NESO's continued sporadic use of BESS in
the BM. Despite a well-publicised policy and comprehensive plan from NESO to
increase BESS dispatch rates in the BM via process and software enhancements
over 2024 and 2025, the December 2023 launch of the new "bulk dispatch"
software was curtailed due to technical issues. Since its re-launch on 8
January 2024, NESO was noted to only be using OBP intermittently, with HEIT's
portfolio having experienced some days of high BM volume, and some of zero.
BESS projects utilise algorithms and AI software to execute revenue
strategies, and so the inconsistent use of OBP by NESO not only limited BESS
volumes in the BM, but also created uncertainty over how much daily capacity
BESS can dedicate to other strategies and services.
The factors listed above caused HEIT to announce the postponement (and
subsequent cancellation) of its first quarterly dividend for the financial
year ended 31 October 2024 ("FY 2024"). The HEIT Board also announced that it
had restructured HEIT's existing debt facilities (to reflect that 70 per cent.
of the portfolio's MW capacity was then operational) in February 2024, and
reviewed its dividend policy to be a proportion of operational free cash flow.
HEIT did experience an improvement in portfolio revenues during the course of
2024, due to a threefold increase in captured BM volumes in the spring versus
the winter and as software and process enhancements at NESO began to take
effect. As wind and solar generation increased their proportionate share of
Great Britain's electricity "stack", wholesale power spreads become wider and
more volatile, thereby increasing arbitrage opportunities for BESS.
Ultimately, total net revenue generation for the period ending 31 October 2024
was £16.3 million (£58.2k/MW/Yr) based on a weighted average operational
capacity of 280.4 MW.
Post-FY 2024, revenue per MW remained strong as expected in the winter period.
The first quarter of the financial year 2025 (ended 31 January 2025) saw
average revenue of £97.8k / MW (97 per cent. higher than the same period
during the previous financial year). As a result of higher operating capacity
and stronger market conditions, HEIT's revenue for the period from 1 November
2024 to 31 January 2025 was approximately £9.7 million, equal to 63 per cent.
of the total revenue earned by HEIT during FY 2024.
Current Market Backdrop
The HEIT Share price has traded at a material and persistent discount to NAV
since early 2023. The HEIT Board believes that this has been driven by a
number of factors, including:
· Challenging macroeconomic conditions, notably the
rapid rise in interest rates which has resulted in a higher cost of capital
for investors and persistent equity outflows from the UK, which has resulted
in a general shift in market sentiment away from UK investment trusts. This
has resulted in the UK investment trust sector, as a whole, trading at a
material discount to NAV. The HEIT Board notes that these pressures persist,
and the UK BESS investment trust sector (excluding HEIT) is currently trading
at an approximate 46 per cent. discount to published NAV. This discount to NAV
continues to restrict HEIT's ability to raise further capital and thus
prevents HEIT from taking advantage of its right of first refusal over Harmony
Energy's development pipeline and grow its asset base.
· Volatility in revenues caused by the Ukraine conflict
and other geopolitical events, with periods where revenues have been both
significantly higher and significantly lower than independent forecasts, which
led to HEIT cancelling its dividend for FY 2024 in February 2024, as described
above. Whilst the HEIT Board is encouraged by the recent high revenue levels
of the portfolio and continues to believe in the strength of HEIT's asset
base, the HEIT Board expects there will continue to be an element of
seasonality to HEIT's revenues and there is no guarantee that these current
revenue levels will persist.
Asset Sale Process
It was in this context, and in order to explore opportunities to maximise
value for HEIT Shareholders, that the HEIT Board engaged Jones Lang LaSalle in
May 2024 with a mandate to seek offers for some, or all, of the HEIT portfolio
(the "Asset Sale"). The aim of this process was to demonstrate to the market
the true value of the HEIT portfolio and the continuing disconnect with the
share price. At the time, HEIT's shares were trading at an approximately 50
per cent. discount to the published Adjusted Net Asset Value per share.
This process attracted strong interest from multiple bidders, including
several bids for all of the HEIT portfolio, and HEIT progressed to a final
stage of negotiations with Drax on an exclusive basis in December 2024 in
relation to a sale of the entire HEIT portfolio. Further updates were made on
26 February 2025 and 11 March 2025 confirming that both parties were
continuing to progress towards conclusion of a definitive agreement of the
Asset Sale.
Offers from Drax and BidCo and factors considered by the HEIT Board
It was against this backdrop of very substantial progress through the Asset
Sale process that HEIT received a proposal made on behalf of one or more funds
managed by Foresight to acquire 100 per cent. of the issued share capital of
HEIT. On 17 March 2025, HEIT and Foresight (on behalf of one or more funds
managed by Foresight and its affiliates) announced they had agreed the
financial terms of an offer by one or more funds managed by Foresight and its
affiliates for the entire issued share capital of HEIT at 84.0 pence per
share. This announcement stated that the HEIT Board had indicated to Foresight
that, should a firm offer be made by one of more of its managed funds on the
financial terms set out above, it would be minded to recommend such an offer
to HEIT Shareholders.
On 25 March 2025, HEIT and Drax Bidco, a wholly owned subsidiary of Drax,
announced that they had agreed the terms of an acquisition of the entire
issued and to be issued ordinary share capital of HEIT by Drax Bidco, intended
to be implemented by way of a scheme of arrangement under Part 26 of the
Companies Act (the "Drax 2.7 Announcement"). The Drax 2.7 Announcement (and
the scheme document subsequently published on 15 April 2025 in respect of the
Drax Offer) included a unanimous recommendation from the HEIT Board to the
HEIT Shareholders to vote in favour of the Drax Offer at the Drax Offer
Shareholder Meetings.
As set out in this announcement, the Boards of HEIT and BidCo have now reached
agreement on the terms of a recommended cash Acquisition, following the
receipt of a superior offer at 92.4 pence per share, pursuant to which BidCo
shall acquire the entire issued and to be issued ordinary share capital of
HEIT.
The HEIT Board has carefully considered the terms of the Acquisition with its
advisers and has concluded that, on balance, it delivers a superior outcome in
terms of both price and deliverability for shareholders than the potential
transaction with Drax under the Asset Sale process and in terms of price for
shareholders than the Drax Offer.
The financial terms of the Acquisition represent:
· a 5 per cent. premium to the Drax Offer of 88.0 pence
per HEIT Share;
· a 42 per cent. premium to the Closing Price of 65.2
pence per HEIT Share on 14 March 2025 (being the last Business Day prior to
the start of the Offer Period); and
· a 94 per cent. premium to the Closing Price of 47.8
pence per HEIT Share on 29 May 2024 (being the last Business Day prior to the
date of the announcement of HEIT's Asset Sale process).
Therefore, after careful consideration together with its financial adviser,
the HEIT Board has concluded that the Acquisition is in the best interests of
HEIT Shareholders and HEIT as a whole. Accordingly, the HEIT Directors
recommend unanimously the Acquisition to HEIT Shareholders and consequently,
the HEIT Board has unanimously withdrawn its recommendation of the Drax Offer
and intends to adjourn the Drax Offer Shareholder Meetings. A separate
announcement will be made by HEIT in this regard.
6. Irrevocable undertakings and letter of intent
Harmony Energy Limited, as well as certain directors of Harmony Energy Limited
and Harmony Energy Advisors, have given irrevocable undertakings to vote, or
procure a vote, in favour of the Scheme at the Court Meeting and the
Resolution(s) to be proposed at the General Meeting (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or procure
acceptance of the Takeover Offer) in respect of a total of 38,578,863 HEIT
Shares representing, in aggregate, approximately 17.0 per cent. of the issued
ordinary share capital of HEIT on the Latest Practicable Date. These
irrevocable undertakings remain binding in the event of a higher competing
offer for HEIT.
In addition, BidCo has received irrevocable undertakings to vote in favour of
the Scheme at the Court Meeting and the Resolution(s) to be proposed at the
General Meeting (or, in the event that the Acquisition is implemented by way
of a Takeover Offer, to accept or procure acceptance of the Takeover Offer)
from:
· PrimeStone Capital LLP in respect of a total of
25,986,450 HEIT Shares representing, in aggregate, approximately 11.44 per
cent. of the ordinary share capital of HEIT in issue on the Latest Practicable
Date;
· Newton Investment Management Limited in respect of a
total of 7,151,972 HEIT Shares representing, in aggregate, approximately 3.15
per cent. of the ordinary share capital of HEIT in issue on the Latest
Practicable Date;
· Nicholas Norman Cournoyer in respect of a total of
6,855,830 HEIT Shares representing, in aggregate, approximately 3.02 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date;
· Church House Investments Limited in respect of a
total of 3,400,000 HEIT Shares representing, in aggregate, approximately 1.50
per cent. of the ordinary share capital of HEIT in issue on the Latest
Practicable Date;
· Trinitybridge Limited in respect of a total of
2,609,923 HEIT Shares representing, in aggregate, approximately 1.15 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date;
· Dowgate Wealth Limited in respect of a total of
2,546,000 HEIT Shares representing, in aggregate, approximately 1.12 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date;
and
· Forest Nominees Limited in respect of a total of
155,000 HEIT Shares representing, in aggregate, approximately 0.07 per cent.
of the ordinary share capital of HEIT in issue on the Latest Practicable Date.
These irrevocable undertakings remain binding in the event of a higher
competing offer for HEIT unless such competing offer for HEIT represents a
value per HEIT Share of not less than 5 per cent. above the Acquisition Price,
and BidCo does not increase the consideration offered under the Scheme to an
amount which is equal to or higher than the consideration offered by the third
party competing offeror either within ten days of the date of the third
party's announcement or offer, or prior to the date of the Court Meeting and
the General Meeting (whichever is the earliest).
BidCo has therefore received irrevocable undertakings in respect of a total of
87,284,038 HEIT Shares representing, in aggregate, approximately 38.43 per
cent. of the ordinary share capital of HEIT in issue on the Latest Practicable
Date.
· BidCo has also received a non-binding letter of
intent to vote in favour of the Scheme at the Court Meeting, and the
resolutions to be proposed at the General Meeting, from Schroder & Co
Limited in respect of a total of 38,710,877 HEIT Shares representing, in
aggregate, approximately 17.04 per cent. of the ordinary share capital of HEIT
in issue on the Latest Practicable Date, subject to the irrevocable
undertaking given by Schroder & Co Limited in respect of the Drax Offer
lapsing.
Further details of these irrevocable undertakings and the letter of intent are
set out in Appendix III to this announcement.
7. Information on BidCo, FEIP II, Averon Park and Foresight
Information on FEIP II
FEIP II is an energy transition fund backed by a number of institutional
investors. FEIP II is the successor fund to Foresight Energy Infrastructure
Partners S.C.Sp, which raised and deployed more than €850 million across a
range of energy transition technologies, including wind, solar, geothermal,
battery storage, pumped hydro storage and grid infrastructure. Foresight acts
as portfolio manager to FEIP II's alternative investment fund manager in
respect of FEIP II.
Information on Averon Park and Blackmead
Blackmead is a private company limited by shares, which was incorporated and
registered in England and Wales on 7 March 2014 with company number 08928992.
It is a wholly-owned direct subsidiary of Averon Park.
Averon Park's principal activity is to acquire and invest in unquoted UK
trading companies.
The directors of Averon Park are Gary Fraser (chairman), Graham Ross Russell
(independent non-executive director), Peter Dicks (independent non-executive
director), Simon Jamieson (independent non-executive director) and Ian Gray
(independent non-executive director).
The issued ordinary share capital of Averon Park is held by Foresight Fund
Managers Limited as nominee for the underlying beneficial investors in Averon
Park, which comprise over 9,000 investors. Foresight Fund Managers Limited is
an indirect subsidiary of Foresight Group Holdings Limited, the London Stock
Exchange-listed ultimate parent company of Foresight Group LLP.
Foresight acts as discretionary investment manager to Averon Park and also
provides (or procures the provision of) company secretarial, administration
and custodian services to Averon Park.
Information on Foresight
Through its many retail and institutional funds, Foresight is a leading
investment manager in real assets and in providing capital for growth with
approximately £13 billion 1 (#_ftn1) of assets under management (as of
January 2025) and extensive experience of investing in energy transition,
renewables and infrastructure projects. The company is headquartered in
Guernsey with its principal office in London and international offices in
Luxembourg, Rome, Madrid, and Sydney. Foresight's infrastructure arm employs
over 182 professionals in the UK, Europe and Australia.
On behalf of its funds, Foresight manages 4.7 GW of green energy technology
capacity globally through the ownership of 438 assets across battery storage,
wind, solar PV, bioenergy / waste plants and reserve power assets.
Foresight has extensive experience in the acquisition, construction, and
operation of battery storage assets, having acquired approximately 450 MW of
projects in the United Kingdom. In addition, Foresight-managed funds have
invested in battery storage developers in the UK and Spain.
Foresight is an experienced and well-resourced investor with substantial
technical and commercial management expertise. Evidence of this can be seen in
Foresight's track record of deploying capital through successful partnerships
and acquisitions, both globally and in the UK.
Information on BidCo
BidCo is a newly formed company that is, currently, indirectly owned by FEIP
II. At completion of the Acquisition, BidCo will be controlled by FEIP II and
Averon Park. BidCo was formed for the purposes of the Acquisition and has not
traded since its date of incorporation, nor has it entered into any
obligations other than in connection with the Acquisition. BidCo is a private
company incorporated under the laws of England and Wales on 21 March 2025 with
company registration number 16332292.
8. Information on HEIT
HEIT is a UK-based investment trust, investing in a diversified portfolio of
utility-scale energy storage and renewable energy generation assets in Great
Britain. HEIT primarily focuses on battery energy storage systems, which play
a crucial role in the transition to a cleaner energy system. These systems
store energy and release it when needed, helping to balance supply and demand
on the grid, and facilitate the integration of renewable energy sources like
wind and solar power.
HEIT's portfolio consists of 100 per cent operational BESS across eight
projects (790.8 MWh / 395.4 MW) in Great Britain.
For FY 2024, HEIT reported revenue of £16.3 million (£58.2k/MW/Yr) and a NAV
of £201.05 million (88.52 pence per HEIT Share), a reduction of 23.30% (a
decrease of 26.89 pence per HEIT Share) from the NAV reported as at 31 October
2023. The NAV total return over FY 2024 was reported to be 21.57%. NAV total
return since IPO was reported to be -2.43%.
On 26 February 2025, HEIT reported an unaudited NAV of £209.83 million (92.38
pence per HEIT Share) at 31 January 2025, an increase of 3.86 pence per HEIT
Share (or an increase of 4.36%) compared to 31 October 2024.
9. Intentions of BidCo and the Foresight Funds
Existing management arrangements
Following completion of the Acquisition, BidCo intends to engage with Harmony
Energy Advisors to agree the terms of an Asset Management Agreement (the
"AMA") for the provision of asset management services to HEIT. The AMA would
replace the existing AIFM Agreement and Investment Advisory Agreement
(together, the "Existing Management Arrangements"). Accordingly, subject to
reaching agreement on the terms of the AMA, BidCo intends to terminate the
Existing Management Arrangements following completion of the Acquisition in
accordance with their terms.
Current portfolio
The Foresight Funds are supportive of HEIT's existing strategy for operating
and managing its portfolio of BESS assets. Following the completion of the
Acquisition, BidCo intends to retain the existing assets that constitute
HEIT's BESS portfolio and maintain the current operation of these assets.
Employees, fixed assets, research and development
As HEIT is an externally managed investment trust, HEIT does not have any
employees and therefore does not operate any pension schemes, nor does it have
any arrangements in place for any employee involvement in its capital.
HEIT has no place of business, fixed assets (other than its BESS portfolio),
research and development function, or headquarters.
Other than as set out above in relation to the Existing Management
Arrangements and below in relation to the HEIT Directors, BidCo does not
currently have any intentions that would result in any change to the balance
of skills and functions required to operate the business.
Board composition and governance arrangements
As noted below, BidCo intends to cancel the trading of HEIT Shares on the
London Stock Exchange immediately following the Effective Date. Consequently,
HEIT will not require publicly traded company governance structures and,
accordingly, it is intended that each of the HEIT Directors will resign from
the HEIT Board with effect on and from the Effective Date.
Trading facilities
HEIT Shares are currently admitted to trading on the London Stock Exchange's
Specialist Fund Segment. As set out in paragraph 13, application will be made
for the cancellation of trading of HEIT Shares on the London Stock Exchange's
Specialist Fund Segment and steps will be taken to re-register HEIT as a
private company.
Following the Effective Date, HEIT will cease to have been an investment trust
effective from the start of the accounting period in which the Acquisition
takes place.
No post-offer undertakings
No statements in this paragraph 9 are "post-offer undertakings" for the
purposes of Rule 19.5 of the Takeover Code.
10. Financing
The cash consideration payable by BidCo to HEIT Shareholders pursuant to the
Acquisition will be funded from equity and debt contributed to BidCo by FEIP
II and Blackmead.
FEIP II and BidCo entered into an Equity Commitment Letter on 16 April 2025
pursuant to which FEIP II has committed an amount of £102,834,607 to be used
to partially fund the Acquisition.
Blackmead and BidCo entered into a Funding Agreement for £107,031,938 on 16
April 2025, pursuant to which Blackmead agreed to fund the balance of the
Acquisition.
RBC Capital Markets, in its capacity as financial adviser to BidCo and
Foresight, is satisfied that sufficient resources are available to BidCo to
satisfy in full the cash consideration payable to HEIT Shareholders pursuant
to the terms of the Acquisition.
11. Offer-related arrangements
Confidentiality Agreement
Foresight and Harmony Energy Advisors entered into a confidentiality agreement
dated 5 August 2024 pursuant to which Foresight agreed to keep confidential
information relating to HEIT and its assets and, subject to certain
exceptions, not to disclose it other than in relation to a transaction related
to HEIT's assets, or to third parties (other than to certain permitted
parties) unless required by applicable law or regulation, or any governmental
or competent regulatory authority (including any relevant securities
exchange). The confidentiality obligations remain in force until the earlier
of (i) two years from the date of the Confidentiality Agreement; and (ii) the
date the parties enter into a definitive written agreement in connection with
a transaction related to HEIT's assets.
Standstill Agreement
FEIP II and HEIT entered into a standstill agreement on 5 November 2024
pursuant to which FEIP II agreed to certain standstill undertakings. All such
undertakings ceased to apply upon the release of the Drax 2.7 Announcement.
12. Structure of and Conditions to the Acquisition
It is intended that the Acquisition will be effected by means of a scheme of
arrangement between HEIT and HEIT Shareholders under Part 26 of the Companies
Act, although BidCo reserves the right to implement the Acquisition by means
of a Takeover Offer (subject to Panel consent and in compliance with the
Takeover Code).
The Scheme of Arrangement is a formal arrangement between HEIT and its
shareholders, which is governed by the Companies Act. The Scheme of
Arrangement must be approved both by the HEIT Shareholders and the Court.
If sanctioned, upon becoming Effective, the Scheme will bind all HEIT
Shareholders (regardless of whether or not they attended, or voted, at the
Court Meeting or the General Meeting (and if they attended and voted, in what
way they voted)). The purpose of the Scheme is to provide for BidCo to become
the holder of the entire issued and to be issued ordinary share capital of
HEIT as at the Effective Date. This is to be achieved by the transfer of the
HEIT Shares to BidCo, in consideration for which the HEIT Shareholders shall
receive the cash consideration on the basis set out in paragraph 2 of this
announcement. The consideration payable under the terms of the Acquisition
will be despatched to HEIT Shareholders no later than 14 days after the
Effective Date.
The Acquisition shall be subject to the Conditions and further terms set out
below and in Appendix I to this announcement and the full terms and
conditions to be set out in the Scheme Document and shall only become
Effective, if, among other things, the following events occur on or before
11.59 p.m. on the Long-Stop Date:
(i) the approval of the Scheme by a majority in number of the
HEIT Shareholders who are present and vote, whether in person or by proxy, at
the Court Meeting and who represent 75 per cent. in value of the HEIT Shares
voted by those HEIT Shareholders;
(ii) the Resolution(s) required to implement the Scheme being duly
passed by HEIT Shareholders representing the requisite majority or majorities
of votes cast at the General Meeting (or any adjournment thereof);
(iii) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to HEIT
and BidCo); and
(iv) the delivery of a copy of the Court Order to the Registrar of
Companies.
The Scheme shall lapse if:
· the Court Meeting and the General Meeting are not
held by the 22nd day after the expected date of such meetings to be set out in
the Scheme Document in due course (or such later date as may be (i) agreed
between BidCo and HEIT or (ii), in a competitive situation, specified by BidCo
with the consent of the Panel);
· the Court Hearing is not held by the 22nd day after
the expected date of such hearing to be set out in the Scheme Document (or
such later date as may be agreed between BidCo and HEIT); or
· the Scheme does not become Effective by no later than
11.59 p.m. on the Long-Stop Date),
provided, however, that the deadlines for the timing of the Court Meeting, the
General Meeting and the Court Hearing as set out above may be waived by BidCo,
and the Long-Stop Date may be extended by agreement between HEIT and BidCo
with the consent of the Panel and (where relevant) the Court.
Once the necessary approvals from HEIT Shareholders have been obtained and the
other Conditions have been satisfied or (where applicable) waived, the Scheme
must be sanctioned by the Court (with or without modification but with any
such modification being acceptable to HEIT and BidCo). The Scheme will become
Effective upon delivery to the Registrar of Companies of a copy of the Court
Order.
Further details of the Scheme, including an indicative timetable for its
implementation, shall be set out in the Scheme Document which, together with
the Forms of Proxy, shall be published as soon as reasonably practicable and,
in any event, within 28 days of this announcement, unless BidCo and HEIT
otherwise agree, and the Panel consents, to a later date. It is expected that
the Court Meeting and the General Meeting will be held as soon as practicable
thereafter, giving the required notice periods, and, subject to the
satisfaction or (where relevant) waiver of the Conditions, the Scheme is
expected to become Effective during the second quarter of 2025. The Scheme
Document and Forms of Proxy shall be made available to all HEIT Shareholders
at no charge to them.
13. De-listing
Prior to the Scheme becoming Effective, HEIT shall make an application for the
cancellation of trading of the HEIT Shares on the London Stock Exchange's
Specialist Fund Segment to take effect on or shortly after the Effective Date.
The last day of dealings in HEIT Shares on the London Stock Exchange's
Specialist Fund Segment is expected to be the Business Day immediately prior
to the Effective Date and no transfers shall be registered after 6.00 p.m. on
that date.
On the Effective Date, HEIT will become a wholly-owned subsidiary of BidCo and
share certificates in respect of HEIT Shares shall cease to be valid and
entitlements to HEIT Shares held within the CREST system shall be cancelled.
14. Dividends
If, on or after the date of this announcement and on or prior to the Effective
Date, any dividend, distribution, or other return of value is declared, made
or paid, or becomes payable by HEIT, BidCo reserves the right to reduce the
Acquisition Price by an amount up to the amount of such dividend,
distribution, or other return of value in which case references to the
Acquisition Price will be deemed to be a reference to the Acquisition Price as
so reduced. In such circumstances, HEIT Shareholders shall be entitled to
retain any such dividend, distribution, or other return of value declared,
made, or paid.
15. Disclosure of interests in HEIT
As at the close of business on the Latest Practicable Date, save as set out in
the irrevocable undertakings referred to in paragraph 6 of this announcement,
neither BidCo or any of its directors, nor, so far as BidCo is aware, any
person acting in concert (within the meaning of the Takeover Code) with it
has: (i) any interest in or right to subscribe for any relevant securities of
HEIT; (ii) any short positions in respect of relevant HEIT Shares (whether
conditional or absolute and whether in the money or otherwise), including any
short position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take delivery;
(iii) any Dealing Arrangement, in relation to HEIT Shares or in relation to
any securities convertible or exchangeable into HEIT Shares; or (iv) borrowed
or lent any relevant HEIT Shares (including, for these purposes, any financial
collateral arrangements of the kind referred to in Note 3 on Rule 4.6 of the
Takeover Code), save for any borrowed shares which had been either on-lent or
sold.
'Interests in securities' for these purposes arise, in summary, when a person
has long economic exposure, whether absolute or conditional, to changes in the
price of securities (and a person who only has a short position in securities
is not treated as interested in those securities). In particular, a person
shall be treated as having an 'interest' by virtue of the ownership, voting
rights, or control of securities, or by virtue of any agreement to purchase,
option in respect of, or derivative referenced to, securities and 'relevant
securities of HEIT' are HEIT Shares or securities convertible or exchangeable
into HEIT Shares.
16. General
BidCo reserves the right to elect (with the consent of the Panel and in
compliance with the Takeover Code) to implement the Acquisition by way of a
Takeover Offer for the HEIT Shares as an alternative to the Scheme. In such
event, the Takeover Offer shall be implemented on the same terms, so far as
applicable, as those which would apply to the Scheme, subject to appropriate
amendments, including (without limitation) an acceptance condition set at a
level permitted by the Panel.
The Acquisition shall be made subject to the Conditions and further terms set
out in Appendix I to this announcement and to be set out in the Scheme
Document. For the purposes of Rule 29.1(d) of the Takeover Code, a valuation
of HEIT's portfolio will be included in the Scheme Document (or, if
applicable, the offer document). The bases and sources of certain financial
information contained in this announcement are set out in Appendix II to
this announcement. A summary of the irrevocable undertakings given in relation
to the Acquisition is contained in Appendix III to this announcement.
Certain terms used in this announcement are defined in Appendix IV to this
announcement.
RBC Capital Markets, Panmure Liberum and Stifel have each given and not
withdrawn their consent to the publication of this announcement with the
inclusion herein of the references to their names in the form and context in
which they appear.
17. Documents available on website
Copies of the following documents, to the extent not already published there,
shall be made available on BidCo's website at www.foresight.group/heit and on
HEIT's website at www.heitp.co.uk/investors/heit-offer by no later than 12.00
noon on the Business Day following the date of this announcement until the
Effective Date:
· this announcement;
· the irrevocable undertakings and letter of intent
referred to in paragraph 6 above and summarised in Appendix III to this
announcement;
· documents relating to the financing of the Scheme
referred to in paragraph 10 above;
· the written consent letters from each of RBC Capital
Markets, Panmure Liberum and Stifel referred to in paragraph 16 above; and
· the Confidentiality Agreement and the standstill
agreement referred to in paragraph 11 above.
The contents of the websites referred to in this announcement and any websites
accessible from hyperlinks on these websites are not incorporated into and do
not form part of this announcement.
Enquiries:
Foresight
Richard Thompson +44 20 3667 8100
Ben Williams
Anouska Morjaria
Matt Hammond
H-Advisors Maitland (PR Advisers to BidCo, FEIP II, Averon Park and Foresight)
Sam Turvey +44 782 783 6246
Genevieve Ryan +44 781 710 5562
Daisy Padovan +44 782 586 1759
Sam Cartwright +44 782 725 4561
RBC Capital Markets (Financial Adviser to BidCo and Foresight)
Mark Rushton +44 20 7653 4000
Ross Board
Matthew Coakes
Samuel Jackson
Harmony Energy Income Trust plc
Norman Crighton, Chairman via Panmure Liberum Limited
Panmure Liberum Limited (Sole Financial Adviser and Rule 3 Adviser and Joint
Broker to HEIT)
Corporate Finance: +44 20 3100 2222
Chris Clarke
Darren Vickers
Will King
M&A:
Tim Medak
Stifel Nicolaus Europe Limited (Joint Broker to HEIT)
Mark Young +44 20 7710 7600
Edward Gibson-Watt
Rajpal Padam
Mark Whitfeld
Camarco (PR Advisers to HEIT)
Eddie Livingstone-Learmonth +44 20 3757 4980
Andrew Turner
Gowling WLG (UK) LLP is retained as legal adviser to HEIT.
Ashurst LLP is retained as legal adviser to Foresight and BidCo.
Inside Information
This announcement contains inside information as defined in the Market Abuse
Regulation. Upon the publication of this announcement via a Regulatory
Information Service, such inside information will be considered to be in the
public domain.
The person responsible for arranging the release of this announcement on
behalf of HEIT is Susan Fadil of the Company Secretary, JTC (UK) Limited. The
LEI of HEIT is 254900O3XI3CJNTKR453.
Important Notices
RBC Europe Limited (trading as RBC Capital Markets), which is authorised by
the Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United Kingdom, is
acting exclusively as financial adviser to BidCo and Foresight and no one else
in connection with the Acquisition and will not be responsible to anyone other
than BidCo and Foresight for providing the protections afforded to its clients
nor for providing advice in relation to the matters referred to in this
announcement. Neither RBC Europe Limited nor any of its affiliates, directors
or employees owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, consequential, whether in contract, tort, in
delict, under statute or otherwise) to any person who is not a client of RBC
Europe Limited in connection with the Acquisition or any matter referred to
herein.
Panmure Liberum Limited ("Panmure Liberum"), which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively as financial adviser, Rule 3 adviser and joint broker to HEIT and
no one else in connection with the Acquisition and the matters and
arrangements set out in this announcement. Panmure Liberum will not regard any
other person as its client in relation to the Acquisition or any other matter
or arrangement set out in this announcement and will not be responsible to
anyone other than HEIT for providing the protections afforded to clients of
Panmure Liberum, nor for providing advice in relation to the Acquisition or
any other matter or arrangement referred to in this announcement. Neither
Panmure Liberum nor any of its affiliates (nor their respective directors,
officers, employees or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, consequential, whether
in contract, in tort, in delict, under statute or otherwise) to any person who
is not a client of Panmure Liberum in connection with the Acquisition, this
announcement, any statement contained herein or otherwise. No representation
or warranty, express or implied, is made by Panmure Liberum as to the contents
of this announcement.
Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively as joint broker to HEIT and no one else in connection with the
Acquisition and the matters and arrangements set out in this announcement.
Stifel will not regard any other person as its client in relation to the
Acquisition or any other matter or arrangement set out in this announcement
and will not be responsible to anyone other than HEIT for providing the
protections afforded to clients of Stifel, nor for providing advice in
relation to the Acquisition or any other matter or arrangement referred to in
this announcement. Neither Stifel nor any of its affiliates (nor their
respective directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
consequential, whether in contract, in tort, in delict, under statute or
otherwise) to any person who is not a client of Stifel in connection with the
Acquisition, this announcement, any statement contained herein or otherwise.
No representation or warranty, express or implied, is made by Stifel as to the
contents of this announcement.
This announcement is for information purposes only and is not intended to and
does not constitute, or form part of, an offer to sell or an invitation to
purchase any securities or the solicitation of an offer to buy, otherwise
acquire, subscribe for, sell or otherwise dispose of any securities, pursuant
to the Acquisition or otherwise, nor shall there be any purchase, sale,
issuance or exchange of securities or such solicitation in any jurisdiction in
which such offer, invitation, solicitation, purchase, sale, issuance or
exchange is unlawful.
The Acquisition shall be made solely by means of the Scheme Document (or, if
the Acquisition is implemented by way of a Takeover Offer, any document by
which the Takeover Offer is made) which, together with the Forms of Proxy (or
forms of acceptance, if applicable), shall contain the full terms and
conditions of the Acquisition, including details of how to vote in respect of
the resolutions proposed in connection with the Acquisition. Any vote,
approval, decision in respect of, or other response to, the Acquisition should
be made only on the basis of the information contained in the Scheme Document
(or if the Acquisition is to be implemented by way of a Takeover Offer, the
offer document).
The statements contained in this announcement are made as at the date of this
announcement, unless some other time is specified in relation to them, and the
release of this announcement shall not give rise to any implication that there
has been no change in the facts set out in this announcement since such date.
This announcement has been prepared for the purpose of complying with English
law, the Takeover Code, the Market Abuse Regulation and the Disclosure
Guidance and Transparency Rules, and the information disclosed may not be the
same as that which would have been disclosed if this announcement had been
prepared in accordance with the laws of any other jurisdictions.
HEIT and BidCo shall prepare the Scheme Document (or if the Acquisition is to
be implemented by way of a Takeover Offer, the offer document) to be
distributed to HEIT Shareholders. HEIT Shareholders should not make any
investment decision in relation to the Acquisition except on the basis of the
Scheme Document (or if the Acquisition is to be implemented by way of a
Takeover Offer, the offer document). HEIT and BidCo urge HEIT Shareholders to
read the Scheme Document in full when it becomes available because it shall
contain important information relating to the Acquisition.
This announcement does not constitute a prospectus or prospectus equivalent
document.
No person should construe the contents of this announcement as legal,
financial or tax advice. If you are in any doubt about the contents of this
announcement or the action you should take, you are recommended to seek your
own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or from an independent financial adviser duly
authorised under FSMA if you are resident in the United Kingdom, or another
appropriately authorised independent financial adviser, if you are in a
territory outside the United Kingdom.
Overseas Shareholders
The release, publication or distribution of this announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by the
laws and/or regulations of those jurisdictions. Persons into whose possession
this announcement comes who are not resident in the United Kingdom or who are
subject to the laws and/or regulations of any jurisdiction other than the
United Kingdom should inform themselves of, and observe, any such applicable
laws and/or regulations in their jurisdiction. In particular, the ability of
persons who are not resident in the United Kingdom to vote their HEIT Shares
with respect to the Scheme at the Court Meeting or the Resolution(s) at the
General Meeting, or to appoint another person as proxy to vote at the Court
Meeting or the General Meeting on their behalf, may be affected by the laws of
the relevant jurisdiction in which they are located. Further details in
relation to Overseas Shareholders will be contained in the Scheme Document.
Any failure to comply with any such restrictions may constitute a violation of
the securities laws of any such jurisdiction. To the fullest extent permitted
by applicable law, the companies and persons involved in the Acquisition
disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by BidCo or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition shall not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Accordingly, copies
of this announcement and all documents relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition (including
custodians, nominees and trustees) must not mail or otherwise distribute or
send them in, into or from such jurisdictions where to do so would violate the
laws in that jurisdiction. If the Acquisition is implemented by a Takeover
Offer (unless otherwise permitted by applicable law or regulation), the
Takeover Offer may not be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including, without
limitation, facsimile, email or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or any facility of a national
state or other securities exchange, of any Restricted Jurisdiction and the
Takeover Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities or from or within any Restricted Jurisdiction.
The Acquisition shall be subject to English law and the jurisdiction of the
Court, and, among other things, the applicable requirements of the Takeover
Code, the Panel, the London Stock Exchange, the Financial Conduct Authority
and the Registrar of Companies.
Additional information for investors in the United States
The Acquisition relates to shares of an English company admitted to trading on
the Specialist Fund Segment of the London Stock Exchange and is proposed to be
effected by means of a scheme of arrangement under Part 26 of the Companies
Act which will be governed by English law. A transaction effected by means of
a scheme of arrangement is not subject to the tender offer rules or the proxy
solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the requirements of United States tender offer and proxy
solicitation rules.
However, if BidCo were to elect to implement the Acquisition by means of a
Takeover Offer and determines to extend such Takeover Offer into the United
States, such Takeover Offer shall be made in compliance with all applicable
United States laws and regulations, including, without limitation, to the
extent applicable, Section 14(e) of the US Exchange Act and Regulation 14E
thereunder. Such a Takeover Offer would be made in the United States by BidCo
and no one else.
In accordance with normal United Kingdom practice and pursuant to Rule
14(e)-5(b) of the US Exchange Act (if applicable), BidCo or its nominees, or
its brokers (acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, shares or other securities of HEIT outside of
the US, other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn.
Were they to be made, these purchases or arrangements to purchase would occur
either in the open market at prevailing prices or in private transactions at
negotiated prices and would comply with applicable law, including the US
Exchange Act. Any information about such purchases or arrangements to purchase
shall be disclosed as required in the UK, shall be reported to a Regulatory
Information Service and shall be available on the London Stock Exchange
website at www.londonstockexchange.com.
The receipt of consideration by a US holder for the transfer of its HEIT
Shares pursuant to the Acquisition may have tax consequences in the US and
such consequences, if any, are not described herein. US holders of HEIT Shares
are urged to consult their independent professional adviser immediately
regarding the legal, tax and financial consequences of the Acquisition
applicable to them.
Neither the US Securities and Exchange Commission nor any securities
commission of any state or other jurisdiction of the United States has
approved the Acquisition, passed judgment upon the fairness or the merits of
the Acquisition, or passed judgment upon the completeness, adequacy or
accuracy of this announcement. Any representation to the contrary is a
criminal offence in the United States.
Financial information relating to HEIT included in this announcement and that
may be included in the Scheme Document (or, if the Acquisition is implemented
by way of a Takeover Offer, the offer document) or any other documents
relating to the Acquisition, has been or shall have been prepared in
accordance with accounting standards applicable in the United Kingdom and may
not be comparable to financial information of US companies or other companies
whose financial statements are prepared in accordance with generally accepted
accounting principles in the United States ("US GAAP"). US GAAP differs in
certain significant respects from accounting standards applicable in the
United Kingdom. None of the financial information in this announcement has
been audited in accordance with auditing standards generally accepted in the
United States or the auditing standards of the Public Company Accounting
Oversight Board (United States).
Each of BidCo and HEIT is organised under the laws of England and Wales. Some
or all of the officers and directors of BidCo and HEIT, respectively, are
residents of countries other than the United States. In addition, all of the
assets of BidCo and HEIT are located outside the United States. As a result,
it may be difficult for US holders of HEIT Shares to effect service of process
within the United States upon BidCo or HEIT or their respective officers or
directors or to enforce against them a judgment of a US court predicated upon
the federal or state securities laws of the United States, including judgments
based upon the civil liability provisions of the US federal securities laws.
US shareholders of HEIT may not be able to sue a non-US company or its
officers or directors in a non-US court for violations of US securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or judgment.
Forward looking statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by HEIT, BidCo, any member of the Wider BidCo Group or
any member of the Wider HEIT Group contain statements which are, or may be
deemed to be, "forward looking statements" about BidCo, HEIT, the Wider BidCo
Group and/or the Wider HEIT Group. Such forward looking statements are
prospective in nature and are not based on historical facts, but rather on
current expectations and on numerous assumptions regarding the business
strategies and the environment in which HEIT, BidCo or any member of the Wider
BidCo Group or any member of the Wider HEIT Group shall operate in the future
and are subject to risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by those statements.
All statements other than statements of historical facts included in this
announcement may be forward-looking statements. In some cases, these forward
looking statements can be identified by the use of forward looking
terminology, including the terms "believes", "estimates", "will look to",
"would look to", "plans", "prepares", "anticipates", "expects", "is expected
to", "is subject to", "budget", "scheduled", "forecasts", "synergy",
"strategy", "goal", "cost-saving", "projects" "intends", "may", "will",
"shall" or "should" or their negatives or other variations or comparable
terminology. Forward-looking statements may include, but are not limited to,
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of BidCo's,
HEIT's, any member of the Wider BidCo Group's or any member of the Wider HEIT
Group's operations and potential synergies resulting from the Acquisition; and
(iii) the effects of global economic conditions and governmental regulation on
BidCo's, HEIT's, any member of the Wider BidCo Group's or any member of the
Wider HEIT Group's business.
By their nature, forward-looking statements involve risks and uncertainties
and are made based on certain key assumptions, because they relate to events
and depend on circumstances that shall occur in the future. Many factors could
cause actual results to differ materially from those projected or implied in
any forward-looking statements, including but not limited to the satisfaction
of or failure to satisfy all or any of the conditions to the Acquisition, as
well as additional factors, such as changes in the global, political,
economic, business, competitive, market and regulatory forces, future exchange
and interest rates, changes in tax rates, future business combinations or
disposals, and any epidemic, pandemic or disease outbreak. If any one or more
of these risks or uncertainties materialises or if any one or more of the
assumptions prove incorrect, actual results may differ materially from those
expected, estimated or projected. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the forward-looking
statements. Such forward looking statements should therefore be construed in
the light of such factors.
Neither HEIT nor BidCo nor any member of the Wider BidCo Group, nor any member
of the Wider HEIT Group nor any of their respective associates or directors,
officers, members or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in this announcement shall actually occur. Given
these risks and uncertainties, potential investors should not place any
reliance on forward looking statements.
The forward-looking statements speak only at the date of this announcement.
All subsequent oral or written forward-looking statements attributable to
BidCo, HEIT, any member of the Wider BidCo Group or any member of the Wider
HEIT Group, or any of their respective associates, members, directors,
officers, employees or advisers or any persons acting on their behalf, are
expressly qualified in their entirety by the cautionary statement above.
HEIT, BidCo, the Wider HEIT Group and the Wider BidCo Group expressly disclaim
any obligation to update or revise such statements (or any other statements)
contained in this announcement other than as required by law or by the rules
of any competent regulatory authority, whether as a result of new information,
future events or otherwise.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified financial benefit statement for any period and no
statement in this announcement should be interpreted to mean that earnings or
earnings per share for BidCo, the Wider BidCo Group or HEIT, as appropriate,
for the current or future financial years would necessarily match or exceed
the historical published earnings or earnings per share for BidCo, the Wider
BidCo Group or HEIT, as appropriate.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 p.m. (London time) on the business day following the date of
the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they shall
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk/ (http://www.thetakeoverpanel.org.uk/) ,
including details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified. You should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by HEIT Shareholders, persons with information rights and other
relevant persons for the receipt of communications from HEIT may be provided
to BidCo during the Offer Period as requested under Section 4 of Appendix 4 of
the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Publication on website and availability of hard copies
A copy of this announcement shall be made available, free of charge, subject
to certain restrictions relating to persons resident in Restricted
Jurisdictions on BidCo's website at www.foresight.group/heit and on HEIT's
website at www.heitp.co.uk/investors/heit-offer by no later than 12.00 noon
(London time) on the first Business Day after the date of this announcement.
For the avoidance of doubt, the contents of these websites and any websites
accessible from hyperlinks on these websites are not incorporated into and do
not form part of this announcement.
HEIT Shareholders and persons with information rights may request a hard copy
of this announcement by contacting HEIT's registrar, Computershare Investor
Services PLC, by writing to them at The Pavilions, Bridgwater Road, Bristol
BS99 6ZZ or by calling them on +44 (0)370 703 6003 during business hours (9.30
a.m. to 5.30 p.m. (London time) Monday to Friday excluding public holidays in
England and Wales). Calls are charged at the standard geographical rate and
will vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Please note that Computershare cannot provide
any financial, legal or tax advice. Calls may be recorded and monitored for
security and training purposes.
HEIT Shareholders and persons with information rights may also request that
all future documents, announcements and information to be sent to them in
relation to the Acquisition should be sent to them in hard copy form, again by
writing to the address set out above or by calling the telephone number above.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
Appendix I
Conditions to, and further Terms of, the Acquisition and the Scheme
Part A: Conditions to the Scheme and the Acquisition
1. The Acquisition will be conditional upon the Scheme
becoming unconditional and Effective, subject to the Takeover Code, by no
later than 11.59 p.m. on the Long-Stop Date.
2. The Scheme will be subject to the following conditions:
2.1 (a) its approval by a
majority in number of the Scheme Shareholders who are present and vote (and
who are entitled to vote), whether in person or by proxy, at the Court Meeting
and who represent 75 per cent. or more in value of the Scheme Shares voted by
those Scheme Shareholders; and
(b) such Court Meeting being held on or before the 22nd day after
the expected date of the Court Meeting to be set out in the Scheme Document in
due course (or such later date as (A) may be agreed by BidCo and HEIT or (B),
in a competitive situation, as may be specified by BidCo with the consent of
the Panel (and, in each case, with the approval of the Court, if such approval
is required));
2.2 (a) the resolution(s)
required to implement the Scheme being duly passed by the requisite majority
or majorities of votes cast at the General Meeting; and
(b) such General Meeting being held on or before the 22nd day
after the expected date of the General Meeting to be set out in the Scheme
Document in due course (or such later date as (A) may be agreed by BidCo and
HEIT or (B), in a competitive situation, as may be specified by BidCo with the
consent of the Panel (and, in each case, with the approval of the Court, if
such approval is required));
2.3 (a) the sanction of the
Scheme by the Court (with or without modification but subject to any
modification being on terms reasonably acceptable to HEIT and BidCo);
(b) the Court Hearing being held on or before the 22nd day after
the expected date of the Court Hearing to be set out in the Scheme Document in
due course (or such later date as (A) may be agreed by BidCo and HEIT or (B),
in a competitive situation, as may be specified by BidCo with the consent of
the Panel (and, in each case, with the approval of the Court, if such approval
is required)); and
(c) the delivery of a copy of the Court Order to the Registrar of
Companies for registration.
3. In addition, subject as stated in Part B below and to the
requirements of the Panel, the Acquisition shall be conditional upon the
following Conditions and, accordingly, the necessary actions to make the
Scheme Effective will not be taken unless such Conditions (as amended if
appropriate) have been satisfied or (where relevant) waived:
General regulatory
(a) in the event that a call-in notice under section 1(1) of the
National Security and Investment Act 2021 ("NSIA") is given in relation to the
Acquisition, the Secretary of State for the purposes of the NSIA either:
(i) having given a final notification under section 26(1)(b) of
the NSIA confirming that no further action will be taken in relation to the
Acquisition under the NSIA; or
(ii) making a final order under section 26(3) of the NSIA
permitting the Acquisition to proceed on terms reasonably satisfactory to
BidCo, and such order not having been revoked or varied in a manner that is
not reasonably satisfactory to BidCo, before the Scheme becomes unconditional
and Effective;
(b) all material notifications, filings or applications which are
reasonably deemed necessary or appropriate by BidCo having been made in
connection with the Acquisition and all necessary waiting periods (including
any extensions thereof) under any applicable legislation or regulation of any
jurisdiction having expired, lapsed or been terminated (as appropriate) and
all material statutory and regulatory obligations in any jurisdiction having
been complied with in each case in respect of the Acquisition and all
Authorisations reasonably deemed necessary or appropriate by BidCo in any
jurisdiction for or in respect of the Acquisition and, except pursuant to
Chapter 3 of Part 28 of the Companies Act, the acquisition or the proposed
acquisition of any shares or other securities in, or control or management of,
HEIT or any other member of the Wider HEIT Group by any member of the Wider
BidCo Group having been obtained in terms and in a form reasonably
satisfactory to BidCo from all appropriate Third Parties or (without prejudice
to the generality of the foregoing) from any person or bodies with whom any
member of the Wider HEIT Group or the Wider BidCo Group has entered into
contractual arrangements and all such Authorisations reasonably deemed
necessary or appropriate to carry on the business of any member of the Wider
HEIT Group in any jurisdiction which are material in the context of the Wider
HEIT Group taken as a whole or in the context of the Acquisition having been
obtained and all such Authorisations remaining in full force and effect at the
time at which the Acquisition becomes otherwise unconditional and there being
no notice or intimation of an intention to revoke, suspend, restrict, modify
or not to renew such Authorisations;
(c) no regulator or Third Party having given notice of a decision
to take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference (and in each case, not having withdrawn
the same), or having required any action to be taken or otherwise having done
anything, or having enacted, made or proposed any statute, regulation,
decision, order or change to published practice (and in each case, not having
withdrawn the same) and there not continuing to be outstanding any statute,
regulation, decision or order which would or might reasonably be expected to:
(i) require, prevent or delay the divestiture or alter the terms
envisaged for any proposed divestiture by any member of the Wider BidCo Group
or by any member of the Wider HEIT Group of all or any part of their
respective businesses, assets or property or impose any limitation on the
ability of all or any of them to conduct their respective businesses (or any
part thereof) or to own, control or manage any of their assets or properties
(or any part thereof) which, in any such case, is material in the context of
the Wider BidCo Group or the Wider HEIT Group in either case taken as a whole
or in the context of the Acquisition;
(ii) except pursuant to Chapter 3 of Part 28 of the Companies Act,
require any member of the Wider BidCo Group or the Wider HEIT Group to acquire
or offer to acquire any shares, other securities (or the equivalent) or
interest in any member of the Wider HEIT Group or any asset owned by any Third
Party (other than Scheme Shares in the implementation of the Acquisition);
(iii) impose any limitation on, or result in a delay in, the ability
of any member of the Wider BidCo Group directly or indirectly to acquire, hold
or to exercise effectively all or any rights of ownership in respect of shares
or other securities in HEIT or on the ability of any member of the Wider HEIT
Group or any member of the Wider BidCo Group directly or indirectly to hold or
exercise effectively all or any rights of ownership in respect of shares or
other securities (or the equivalent) in, or to exercise voting or management
control over, any member of the Wider HEIT Group to the extent which, in any
such case, is material in the context of the Wider BidCo Group or the Wider
HEIT Group in either case taken as a whole or in the context of the
Acquisition;
(iv) otherwise adversely affect any or all of the business, assets,
profits or prospects of any member of the Wider HEIT Group or any member of
the Wider BidCo Group to an extent which is material in the context of the
Wider BidCo Group or the Wider HEIT Group taken as a whole or in the context
of the Acquisition;
(v) result in any member of the Wider HEIT Group or any member of
the Wider BidCo Group ceasing to be able to carry on business under any name
under which it presently carries on business;
(vi) make the Acquisition, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or control or
management of, HEIT by any member of the Wider BidCo Group void, unenforceable
and/or illegal under the laws of any relevant jurisdiction, or otherwise,
directly or indirectly prevent or prohibit, restrict, restrain, or delay, or
otherwise interfere with the implementation of, or impose additional
conditions or obligations with respect to, or otherwise challenge, impede,
interfere or require amendment of the Acquisition or the acquisition or
proposed acquisition of any shares or other securities in, or control or
management of, HEIT by any member of the Wider BidCo Group to the extent
which, in any such case, is material in the context of the Wider BidCo Group
or the Wider HEIT Group in either case taken as a whole or in the context of
the Acquisition;
(vii) require, prevent or materially delay a divestiture by any member
of the Wider BidCo Group of any shares or other securities (or the equivalent)
in any member of the Wider HEIT Group or any member of the Wider BidCo Group;
or
(viii) impose any material limitation on the ability of any member of
the Wider BidCo Group of any member of the Wider HEIT Group to conduct,
integrate or co-ordinate all or any part of its business with all or any part
of the business of any other member of the Wider BidCo Group and/or the Wider
HEIT Group,
and all applicable waiting and other time periods (including any extensions
thereof) during which any such regulator or Third Party could decide to take,
institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under the laws of
any jurisdiction in respect of the Acquisition or the acquisition or proposed
acquisition of any HEIT Shares or otherwise intervene having expired, lapsed
or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc.
(d) except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other instrument
to which any member of the Wider HEIT Group is a party or by or to which any
such member or any of its assets is or may be bound, entitled or be subject or
any event or circumstance which, as a consequence of the Acquisition or the
acquisition or the proposed acquisition by any member of the Wider BidCo Group
of any shares or other securities (or the equivalent) in HEIT or because of a
change in the control or management of any member of the Wider HEIT Group or
otherwise, could or might, reasonably be expected to result in any of the
following, in any case to an extent which is or would be material in the
context of the Wider BidCo Group or the Wider HEIT Group in either case taken
as a whole or in the context of the Acquisition:
(i) any monies borrowed by, or any other indebtedness, actual or
contingent, of, or any grant available to, any member of the Wider HEIT Group
being or becoming repayable, or capable of being declared repayable,
immediately or prior to its or their stated maturity date or repayment date,
or the ability of any such member to borrow monies or incur any indebtedness
being withdrawn or inhibited or being capable of becoming or being withdrawn
or inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security interest
over the whole or any part of the business, property or assets of any member
of the Wider HEIT Group or any such mortgage, charge or other security
interest (whenever created, arising or having arisen) having become
enforceable;
(iii) any such arrangement, agreement, lease, licence, franchise,
permit or other instrument being terminated or the rights, liabilities,
obligations or interests of any member of the Wider HEIT Group being adversely
modified or adversely affected or any obligation or liability arising or any
adverse action being taken or arising thereunder;
(iv) any liability of any member of the Wider HEIT Group to make any
severance, termination, bonus or other payment to any of its directors, or
other officers;
(v) the rights, liabilities, obligations, interests or business of
any member of the Wider HEIT Group or any member of the Wider BidCo Group
under any such arrangement, agreement, licence, permit, lease or instrument or
the interests or business of any member of the Wider HEIT Group or any member
of the Wider BidCo Group in or with any other person or body or firm or
company (or any arrangement or arrangement relating to any such interests or
business) being or becoming capable of being terminated, or adversely modified
or adversely affected or any obligation or liability arising or any adverse
action being taken thereunder;
(vi) the value of, or the financial or trading position or prospects
of, any member of the Wider HEIT Group being prejudiced or adversely affected;
or
(vii) the creation or acceleration of any liability (actual or
contingent) by any member of the Wider HEIT Group other than trade creditors
or other liabilities incurred in the ordinary course of business or in
connection with the Acquisition,
and, except as Disclosed, no event having occurred which, under any provision
of any arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider HEIT Group is a party or by or to
which any such member or any of its assets are bound, entitled or subject,
would or might result in any of the events or circumstances as are referred to
in Conditions 3(d)(i) to (vii);
Certain events occurring since 31 October 2024
(e) except as Disclosed, no member of the Wider HEIT Group having
since 31 October 2024:
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of additional
shares of any class, or securities or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares, securities or convertible securities or transferred or sold
or agreed to transfer or sell or authorised or proposed the transfer or sale
of HEIT Shares out of treasury (except, where relevant, as between HEIT and
wholly-owned subsidiaries of HEIT or between the wholly-owned subsidiaries of
HEIT);
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution (whether
payable in cash or otherwise) other than dividends (or other distributions
whether payable in cash or otherwise) lawfully paid or made by any
wholly-owned subsidiary of HEIT to HEIT or any of its wholly-owned
subsidiaries;
(iii) other than pursuant to the Acquisition (and except for
transactions between HEIT and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of HEIT and transactions in the ordinary and usual
course of business) implemented, effected, authorised or proposed or announced
its intention to implement, effect, authorise or propose any merger, demerger,
reconstruction, amalgamation, scheme, commitment, or acquisition, or disposal
of assets or shares, or loan capital (or the equivalent thereof) in any
undertaking or undertakings in any such case to an extent which is material in
the context of the Wider HEIT Group taken as a whole;
(iv) except for transactions between HEIT and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of HEIT and except for
transactions in the ordinary course of business disposed of, or transferred,
mortgaged or created any security interest over any material asset or any
right, title or interest in any material asset or authorised, proposed or
announced any intention to do so;
(v) (except for transactions between HEIT and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of HEIT) issued,
authorised or proposed or announced an intention to authorise or propose, the
issue of or made any change in or to the terms of any debentures or become
subject to any contingent liability or incurred or increased any indebtedness
which is material in the context of the Wider HEIT Group as a whole;
(vi) entered into or varied or authorised, proposed or announced its
intention to enter into or vary any material contract, arrangement, agreement,
transaction or commitment (whether in respect of capital expenditure or
otherwise) except in the ordinary course of business which is of a long term,
unusual or onerous nature or magnitude or which is or which involves or could
reasonably be expected to involve an obligation of a nature or magnitude which
is likely to be materially restrictive on the business of any member of the
Wider HEIT Group which, taken together with any other such material
transaction, arrangement, agreement, contract or commitment, is material in
the context of the Wider HEIT Group as a whole;
(vii) entered into or materially varied the terms of, or made any
offer (which remains open for acceptance) to enter into or vary to a material
extent the terms of any contract, service agreement, commitment or arrangement
with any director;
(viii) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, except in respect of the matters mentioned in sub-paragraph (i) above,
made any other change to any part of its share capital, in each case, to the
extent which is material in the context of the Wider HEIT Group taken as a
whole or in the context of the Acquisition;
(ix) other than with respect to claims between HEIT and its
wholly-owned subsidiaries or between such wholly-owned subsidiaries or in the
ordinary course of business, waived, compromised or settled any claim which is
material in the context of the Wider HEIT Group as a whole;
(x) (except as disclosed on publicly available registers or in
connection with the Acquisition) made any alteration to its memorandum or
articles of association or other incorporation documents which is material in
the context of the Acquisition;
(xi) been unable, or admitted in writing that it is unable, to pay
its debts or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness, or having
stopped or suspended (or threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on all or a substantial
part of its business which is material in the context of the Wider HEIT Group
taken as a whole;
(xii) (other than in respect of a member of the Wider HEIT Group which
is dormant and was solvent at the relevant time) taken or proposed any steps,
corporate action or had any legal proceedings instituted or threatened against
it in relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution,
reorganisation or for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any of its
assets or revenues or any analogous or equivalent steps or proceedings in any
jurisdiction or appointed any analogous person in any jurisdiction or had any
such person appointed;
(xiii) (except for transactions between HEIT and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries) made, authorised,
proposed or announced an intention to propose any change in its loan capital
other than in the ordinary course of business and, in each case, to the extent
which is material in the context of the Wider HEIT Group taken as a whole or
in the context of the Acquisition;
(xiv) entered into, implemented or authorised the entry into, any joint
venture, asset or profit sharing arrangement, partnership or merger of
business or corporate entities (other than the Scheme);
(xv) having taken (or agreed or proposed to take) any action which
requires or would require, the consent of the Panel or the approval of HEIT
Shareholders in general meeting in accordance with, or as contemplated by,
Rule 21.1 of the Takeover Code; or
(xvi) entered into any agreement, arrangement, commitment or contract
otherwise than in the ordinary course of business or passed any resolution or
made any offer (which remains open for acceptance) with respect to or
announced an intention to, or to propose to, effect any of the transactions,
matters or events referred to in this Condition 3(e);
No adverse change, litigation, regulatory enquiry or similar
(f) except as Disclosed, since 31 October 2024 there having been:
(i) no adverse change and no circumstance having arisen which
would or might reasonably be expected to result in any adverse change in, the
business, assets, financial or trading position or profits or prospects or
operational performance of any member of the Wider HEIT Group which is
material in the context of the Wider HEIT Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings having been threatened, announced or instituted by or
against or remaining outstanding against or in respect of, any member of the
Wider HEIT Group or to which any member of the Wider HEIT Group is or may
become a party (whether as claimant, defendant or otherwise) having been
threatened, announced, instituted or remaining outstanding by, against or in
respect of, any member of the Wider HEIT Group, in each case which might
reasonably be expected to have a material adverse effect on the Wider HEIT
Group taken as a whole;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member of the Wider
HEIT Group having been threatened, announced or instituted or remaining
outstanding by, against or in respect of any member of the Wider HEIT Group,
in each case which might reasonably be expected to have a material adverse
effect on the Wider HEIT Group taken as a whole;
(iv) no contingent or other liability having arisen or become
apparent to BidCo or increased other than in the ordinary course of business
which has or is reasonably likely to affect adversely the business, assets,
financial or trading position or profits or prospects of any member of the
Wider HEIT Group to an extent which is material in the context of the Wider
HEIT Group taken as a whole; and
(v) no steps having been taken and no omissions having been made
which have or are reasonably likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of the Wider
HEIT Group which is necessary for the proper carrying on of its business and
the withdrawal, cancellation, termination or modification of which might
reasonably be expected to have a material adverse effect on the Wider HEIT
Group taken as a whole;
No discovery of certain matters regarding information, liabilities and
environmental issues
(g) except as Disclosed, BidCo not having discovered that:
(i) any financial, business or other information concerning the
Wider HEIT Group publicly announced prior to the date of this announcement or
disclosed at any time to any member of the Wider BidCo Group by or on behalf
of any member of the Wider HEIT Group prior to the date of this announcement
is misleading, contains a material misrepresentation of any fact, or omits to
state a fact necessary to make that information not misleading and which was
not subsequently corrected before the date of this announcement by disclosure
either publicly or otherwise to BidCo or its professional advisers, in any
such case to an extent which is material in the context of the Wider HEIT
Group take as a whole or in the context of the Acquisition;
(ii) any member of the Wider HEIT Group or any partnership,
company or other entity in which any member of the Wider HEIT Group has a
significant economic interest and which is not a subsidiary undertaking of
HEIT is, otherwise than in the ordinary course of business, subject to any
liability, contingent or otherwise and which is material in the context of the
Wider HEIT Group taken as a whole;
(iii) any past or present member of the Wider HEIT Group has not
complied with all applicable legislation, regulations or other requirements of
any jurisdiction or any Authorisations relating to the use, treatment,
storage, carriage, disposal, discharge, spillage, release, leak or emission of
any waste or hazardous substance, or any substance likely to impair the
environment (including property) or harm human or animal health, or otherwise
relating to environmental matters or the health and safety of humans, which
non-compliance would be likely to give rise to any liability including any
penalty for non-compliance (whether actual or contingent) on the part of any
member of the Wider HEIT Group and which is material in the context of the
Wider HEIT Group taken as a whole or in the context of the Acquisition;
(iv) there has been a disposal, discharge, spillage, accumulation,
release, leak, emission or the migration, production, supply, treatment,
storage, transport or use of any waste or hazardous substance or any substance
likely to impair the environment (including any property) or harm human or
animal health which (whether or not giving rise to non-compliance with any law
or regulation), would be likely to give rise to any liability (whether actual
or contingent) on the part of any member of the Wider HEIT Group and which is
material in the context of the Wider HEIT Group taken as a whole or in the
context of the Acquisition;
(v) there is, or is reasonably likely to be, any obligation or
liability (whether actual or contingent) or requirement to make good,
remediate, repair, reinstate or clean up any property, asset or any controlled
waters currently or previously owned, occupied, operated or made use of or
controlled by any past or present member of the Wider HEIT Group (or on its
behalf), or in which any such member may have or previously have had or be
deemed to have had an interest, under any environmental legislation, common
law, regulation, notice, circular, Authorisation or order of any Third Party
in any jurisdiction or to contribute to the cost thereof or associated
therewith or indemnify any person in relation thereto, in any case, to an
extent which is material in the context of the Wider HEIT Group taken as a
whole or in the context of the Acquisition; or
(vi) circumstances exist (whether as a result of the Acquisition or
otherwise) which would be reasonably likely to lead to any Third Party
instituting (or whereby any member of the Wider HEIT Group would be likely to
be required to institute), an environment audit or take any steps which would
in any such case be reasonably likely to result in any actual or contingent
liability to improve or install new plant or equipment or to make good,
repair, reinstate or clean up any property of any description or any asset now
or previously owned, occupied or made use of by any past or present member of
the Wider HEIT Group (or on its behalf) or by any person for which a member of
the Wider HEIT Group is or has been responsible, or in which any such member
may have or previously have had or be deemed to have had an interest, in any
case, to an extent which is material in the context of the Wider HEIT Group
taken as a whole or in the context of the Acquisition;
Anti-corruption and sanctions
(vii) any member of the Wider HEIT Group or any person that performs
or has performed services for or on behalf of any such company is or has
engaged in any activity, practice or conduct which would constitute an offence
under the Bribery Act 2010 or any other applicable anti-corruption
legislation;
(viii) any member of the Wider HEIT Group is ineligible to be awarded
any contract or business under regulation 57 of the Public Contracts
Regulations 2015 or regulation 80 of the Utilities Contracts Regulations 2015
(each as amended) to the extent reasonably deemed necessary in order for such
member of the Wider HEIT Group to carry on its business as currently
constituted; or
(ix) any member of the Wider HEIT Group has engaged in any
transaction which would cause any member of the Wider BidCo Group to be in
breach of applicable law or regulation upon completion of the Acquisition,
including the economic sanctions of the United States Office of Foreign Assets
Control or HM Treasury & Customs, or with any government, entity or
individual targeted by any of the economic sanctions of the United Nations,
United States, United Kingdom or the European Union or any of its member
states, save that this shall not apply if and to the extent that it would
result in a breach of any applicable Blocking Law; or
No criminal property
(x) any asset of any member of the Wider HEIT Group constitutes
criminal property as defined by section 340(3) of the Proceeds of Crime Act
2002 (but disregarding paragraph (b) of that definition).
Part B: Certain further terms of the Acquisition
1. Subject to the requirements of the Panel and the Takeover
Code, BidCo reserves the right, in its sole discretion, to waive, in whole or
in part, all or any of the Conditions set out in Part A of Appendix I
above, except Conditions 2.1(a), 2.2(a), 2.3(a) and 2.3(c), which cannot
be waived. If any of Conditions 2.1(b), 2.2(b), and 2.3(b) is not
satisfied by the relevant deadline specified in the relevant Condition, BidCo
shall make an announcement by 8.00 a.m. on the Business Day following such
deadline confirming whether it has invoked the relevant Condition, waived the
relevant deadlines, or agreed with HEIT (or, in a competitive situation, with
the consent of the Panel) to extend the relevant deadline.
2. If BidCo is required by the Panel to make an offer for
HEIT Shares under the provisions of Rule 9 of the Takeover Code, BidCo may
make such alterations to any of the above Conditions and terms of the
Acquisition as are necessary to comply with the provisions of that Rule.
3. BidCo shall be under no obligation to waive (if capable
of waiver), to determine to be or remain satisfied or to treat as fulfilled
any of the Conditions in Part A of Appendix I above that are capable of
waiver by a date earlier than the latest date for the fulfilment or waiver of
that Condition notwithstanding that the other Conditions of the Acquisition
may at such earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such Conditions may
not be capable of satisfaction or fulfilment.
4. Under Rule 13.5(a) of the Takeover Code and subject to
paragraph 5 below, BidCo may only invoke a Condition so as to cause the
Acquisition not to proceed, to lapse, or to be withdrawn with the consent of
the Panel. The Panel shall normally only give its consent if the circumstances
which give rise to the right to invoke the Condition are of material
significance to BidCo in the context of the Acquisition. This shall be judged
by reference to the facts of each case at the time that the relevant
circumstances arise.
5. Condition 1 (subject to Rule 12 of the Takeover Code),
Conditions 2.1, 2.2 and 2.3 in Part A of Appendix I above, and,
if applicable, any acceptance condition if the Acquisition is implemented by
means of a Takeover Offer, are not subject to Rule 13.5(a) of the Takeover
Code.
6. Any Condition that is subject to Rule 13.5(a) of the
Takeover Code may be waived by BidCo.
7. The HEIT Shares acquired under the Acquisition shall be
acquired fully paid and free from all liens, equities, charges, encumbrances,
options, rights of pre-emption and any other third party rights and interests
of any nature and together with all rights now or hereafter attaching or
accruing to them, including, without limitation, voting rights and the right
to receive and retain in full all dividends and other distributions (if any)
declared, made or paid, or any other return of value (whether by reduction of
share capital or share premium account or otherwise) made on or after the
Effective Date.
8. If, on or after the date of this announcement and prior
to or on the Effective Date, any dividend, distribution or other return of
value is declared, paid or made, or becomes payable by HEIT, BidCo reserves
the right to (without prejudice to any right of BidCo, with the consent of the
Panel, to invoke Condition 3(e)(ii) in Part A of Appendix I above)
reduce the consideration payable under the Acquisition to reflect the
aggregate amount of such dividend, distribution, or other return of value. In
such circumstances, HEIT Shareholders shall be entitled to retain any such
dividend, distribution, or other return of value declared, made, or paid.
If on or after the date of this announcement, and to the extent that any such
dividend, distribution or other return of value has been declared, paid, or
made, or becomes payable by HEIT on or prior to the Effective Date and BidCo
exercises its rights under this paragraph 8 to reduce the consideration
payable under the terms of the Acquisition, any reference in this announcement
to the consideration payable under the terms of the Acquisition shall be
deemed to be a reference to the consideration as so reduced.
If and to the extent that such a dividend, distribution, or other return of
value has been declared or announced, but not paid or made, or is not payable
by reference to a record date on or prior to the Effective Date and is or
shall be (i) transferred pursuant to the Acquisition on a basis which entitles
BidCo to receive the dividend, distribution, or other return of value and to
retain it; or (ii) cancelled, the consideration payable under the terms of the
Acquisition shall not be subject to change in accordance with this paragraph
8.
BidCo shall also be entitled to reduce the consideration payable under the
Acquisition in such circumstances as are, and by such amount as is, permitted
by the Panel.
Any exercise by BidCo of its rights referred to in this paragraph 8 shall be
the subject of an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the Acquisition.
9. BidCo reserves the right to elect (with the consent of
the Panel and in compliance with the Takeover Code) to implement the
Acquisition by way of a Takeover Offer for the HEIT Shares as an alternative
to the Scheme. In such event, the Takeover Offer shall be implemented on the
same terms, so far as applicable as those which would apply to the Scheme,
subject to appropriate amendments, including (without limitation) an
acceptance condition set at a level permitted by the Panel. Further, if
sufficient acceptances of such offer are received and/or sufficient HEIT
Shares are otherwise acquired, it is the intention of BidCo to apply the
provisions of the Companies Act to acquire compulsorily any outstanding HEIT
Shares to which such offer relates.
10. The availability of the Acquisition to persons not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom should
inform themselves about and observe any applicable requirements.
11. The Acquisition is not being made, directly or indirectly,
in, into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, email or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of,
any jurisdiction where to do so would violate the laws of that jurisdiction.
12. The Acquisition and the Scheme are governed by English law
and are subject to the jurisdiction of the Court and to the Conditions and
further terms set out in this Appendix I and to be set out in the Scheme
Document. The Acquisition shall be subject to the applicable requirements of
the Companies Act, the Court, the Takeover Code, the Panel, the London Stock
Exchange and the Financial Conduct Authority.
13. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
Appendix II
Sources of Information and Bases of Calculation
1. On 15 April 2025 (being the latest practicable date prior
to the date of this announcement), there were 227,128,295 HEIT Shares in
issue. HEIT does not hold any shares in treasury and has not issued or granted
any options or other rights to subscribe for shares or other securities of
HEIT. The International Securities Identification Number for HEIT Shares is
GB00BLNNFY18.
2. Any references to the issued and to be issued share
capital of HEIT are based on the 227,128,295 HEIT Shares referred to in
paragraph 1 above.
3. The value of the Acquisition based on the Acquisition
Price of 92.4 pence per HEIT Share is calculated on the basis of the issued
and to be issued share capital of HEIT (as set out in paragraph 2 above).
4. The Closing Prices on 14 March 2025 and 29 May 2024 are
taken from the Daily Official List.
5. Unless otherwise stated, the financial information
relating to HEIT is prepared in accordance with accounting standards
applicable in the United Kingdom and has been extracted or derived (without
adjustment) from the audited consolidated financial statements of HEIT for the
financial year to 31 October 2024.
6. Unless otherwise stated, information relating to HEIT's
NAV has been sourced from HEIT's financial results.
7. Unless otherwise stated, portfolio information relating
to HEIT has been derived from data provided by Harmony Energy Advisors.
Appendix III
Irrevocable Undertakings and Letter of Intent
The following holders or controllers of HEIT Shares have given irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting and the
Resolution(s) to be proposed at the General Meeting and, if BidCo exercises
its right to implement the Acquisition by way of a Takeover Offer, to accept
or procure acceptance of such offer:
Part A: Harmony Energy and certain directors of Harmony Energy and Harmony
Energy Advisors irrevocable undertakings
Name of HEIT Shareholder giving undertaking Number of HEIT Shares in respect of which undertaking Percentage of HEIT issued share capital
is given
Harmony Energy 27,338,696 12.04%
Ritchie-Bland Energy (Number 2) Ltd((1)) 5,976,314 2.63%
Peter Kavanagh((2),(3)) 2,706,990 1.19%
Alexander Maxwell Slade((2)) 1,079,994 0.48%
Peter Grogan((3)) 976,869 0.43%
Alexander Thornton((3)) 500,000 0.22%
TOTAL 38,578,863 16.99%
(1) James Ritchie-Bland, a director of Harmony Energy Advisors Limited and
Harmony Energy Limited, is a controller of Ritchie-Bland Energy (Number 2)
Ltd.
(2) Director of Harmony Energy Advisors Limited
(3) Director of Harmony Energy Limited
These irrevocable undertakings will cease to be binding if:
· BidCo announces (with the consent of the Panel)
that it does not intend to proceed with the Acquisition and no new, revised or
replacement offer is announced in accordance with Rule 2.7 of the Takeover
Code at the same time;
· the Scheme (or Takeover Offer) lapses or is
withdrawn and no new, revised or replacement offer is announced in accordance
with Rule 2.7 of the Takeover Code at the same time; or
· any competing offer for the entire issued and
to be issued share capital of HEIT is declared unconditional or, if
implemented by way of a scheme of arrangement, becomes effective.
Part B: Other HEIT Shareholder irrevocable undertakings
Name of HEIT Shareholder giving undertaking Number of HEIT Shares in respect of which undertaking Percentage of HEIT issued share capital
is given
PrimeStone Capital LLC 25,986,450 11.44%
Newton Investment Management Limited 7,151,972 3.15%
Nicholas Norman Cournoyer 6,855,830 3.02%
Church House Investments Limited 3,400,000 1.50%
Trinitybridge Limited 2,609,923 1.15%
Dowgate Wealth Limited 2,546,000 1.12%
Forest Nominees Limited 155,000 0.07%
TOTAL 48,705,175 21.44%
The irrevocable undertakings will cease to be binding if:
· BidCo announces (with the consent of the Panel)
that it does not intend to proceed with the Acquisition and no new, revised or
replacement offer is announced in accordance with Rule 2.7 of the Takeover
Code at the same time;
· the Scheme (or Takeover Offer) lapses or is
withdrawn and no new, revised or replacement offer is announced in accordance
with Rule 2.7 of the Takeover Code at the same time; or
· any competing offer for HEIT is announced
provided that such offer represents a value per HEIT Share of not less than 5
per cent. above the Acquisition Price, and BidCo does not increase the
consideration offered under the Scheme to an amount which is equal to or
higher than the consideration offered by the third party competing offeror
either within ten days of the date of the third party's announcement or offer,
or prior to the date of the Court Meeting and the General Meeting (whichever
is the earliest).
The irrevocable undertaking given by Nicholas Norman Cournoyer will also cease
to be binding in the event a competing offer for HEIT is declared
unconditional, or, if implemented by way of scheme of arrangement, becomes
effective.
Part C: Letter of intent:
BidCo has also received a non-binding letter of intent to vote in favour of
the Scheme at the Court Meeting, and the resolutions to be proposed at the
General Meeting, from Schroder & Co Limited in respect of a total of
38,710,877 HEIT Shares representing, in aggregate, approximately 17.04 per
cent. of the HEIT issued share capital.
The letter of intent remains subject to the irrevocable undertaking given by
Schroder & Co Limited in relation to the Drax Offer lapsing prior to
Schroder & Co Limited taking any of the actions referred to in the letter
of intent.
A copy of each of the irrevocable undertakings and letter of intent will be
available on HEIT's website at www.heitp.co.uk/investors/heit-offer and on
BidCo's website at www.foresight.group/heit by no later than 12 noon (London
time) on the Business Day following this announcement.
Appendix IV
Definitions
The following definitions apply throughout this announcement unless the
context requires otherwise:
"Acquisition" the recommended cash acquisition by BidCo of the entire issued and to be
issued share capital of HEIT to be effected by means of the Scheme (or by way
of Takeover Offer under certain circumstances described in this announcement)
and, where the context admits, any subsequent revision, variation, extension
or renewal thereof
"Acquisition Price" 92.4 pence per HEIT Share
"Amended HEIT Articles" the articles of association of HEIT, as amended to include provisions, in
terms approved by BidCo, that avoid any person (other than BidCo or its
nominee) remaining as a holder of HEIT Shares after the Effective Date, such
proposed amendment to be set out in full in the notice of the General Meeting
"AIFM Agreement" the alternative investment fund management agreement dated 14 October 2021
between HEIT and JTC Global AIFM Solutions Limited
"Asset Sale" has the meaning given in paragraph 5 of this announcement
"Authorisations" regulatory authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions or approvals
"Averon Park" Averon Park Limited, a private limited company incorporated and registered in
England and Wales with registered number 08669482, the registered office of
which is at C/O Foresight Group LLP, The Shard, 32 London Bridge Street,
London SE1 9SG
"BESS" battery energy storage systems
"BidCo" PP Bidco Limited, a private company incorporated in England and Wales with
registered number 16332292
"Blackmead" Blackmead Infrastructure Limited, a private limited company incorporated and
registered in England and Wales with registered number 08928992, the
registered office of which is at C/O Foresight Group LLP, The Shard, 32 London
Bridge Street, London SE1 9SG
"Blocking Law" means (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November
1996, as amended from time to time (or any law or regulation implementing such
Regulation in any member state of the European Union); or (ii) any provision
of Council Regulation (EC) No 2271/1996 of 22 November 1996, as amended from
time to time, as it forms part of UK law by virtue of the European Union
(Withdrawal) Act 2018
"Business Day" a day (other than Saturdays, Sundays and public holidays in the UK) on which
banks are open for business in London
"Closing Price" the closing middle market price of a HEIT Share on a particular trading day as
derived from the Daily Official List
"Companies Act" the Companies Act 2006, as amended from time to time
"Conditions" the conditions to the implementation of the Scheme and the Acquisition, as set
out in Appendix I to this announcement and to be set out in the Scheme
Document
"Confidentiality Agreement" the confidentiality agreement dated 5 August 2024 between Foresight and
Harmony Energy Advisors as described in paragraph 11 of this announcement
"Court" the High Court of Justice in England and Wales
"Court Hearing" the hearing by the Court of the application to sanction the Scheme under Part
26 of the Companies Act
"Court Meeting" the meeting of Scheme Shareholders to be convened pursuant to an order of the
Court under the Companies Act for the purpose of considering and, if thought
fit, approving the Scheme, including any adjournment thereof, notice of which
is to be contained in the Scheme Document
"Court Order" the order of the Court sanctioning the Scheme under section 899 of the
Companies Act
"CREST" the system for the paperless settlement of trades in securities and the
holding of uncertificated securities operated by Euroclear
"Daily Official List" the Daily Official List published by the London Stock Exchange
"Dealing Arrangement" an arrangement of the kind referred to in Note 11(a) on the definition of
acting in concert in the Takeover Code
"Dealing Disclosure" has the same meaning as in Rule 8 of the Takeover Code
"Disclosed" the information disclosed by, or on behalf of HEIT:
(a) in the annual report and accounts of the HEIT Group for the
financial year ended 31 October 2024;
(b) to BidCo or its affiliates (or its or their respective officers,
employees, agents or advisers) at the management meeting held on 13 March
2025;
(c) in this announcement;
(d) in any other announcement to a Regulatory Information Service
by, or on behalf of HEIT prior to the publication of this announcement; or
(e) as otherwise fairly disclosed to BidCo or its affiliates (or its
or their respective officers, employees, agents or advisers) prior to the date
of this announcement
"Disclosure Guidance and Transparency Rules" the disclosure guidance and transparency rules made by the FCA under Part VI
of FSMA
"Drax" Drax Group plc, a public limited company incorporated in England and Wales
with registered number 05562053 and whose registered office is at Drax Power
Station, Selby, North Yorkshire, YO8 8PH
"Drax 2.7 Announcement" the announcement by HEIT and Drax on 25 March 2025, pursuant to Rule 2.7 of
the Takeover Code, of an agreement of the terms of an acquisition of the
entire issued and to be issued ordinary share capital of HEIT by Drax Bidco
"Drax Bidco" Drax BESS Holdco Limited a private limited company incorporated in England and
Wales with registered number 16152612 and whose registered office is at Drax
Power Station, Selby, North Yorkshire, United Kingdom, YO8 8PH
"Drax Offer" 88.0 pence per HEIT Share in cash as set out in the Drax 2.7 Announcement
"Drax Offer Shareholder Meetings" the court meeting and the general meeting convened in connection with the Drax
Offer for 10:00 a.m. and 10:15 a.m., respectively, on 7 May 2025
"Effective" in the context of the Acquisition:
(a) if the Acquisition is implemented by way of the Scheme, the
Scheme having become effective in accordance with its terms upon the delivery
of a copy of the Court Order to the Registrar of Companies; or
(b) if the Acquisition is implemented by way of a Takeover Offer,
such Takeover Offer having become or been declared unconditional in all
respects in accordance with the Takeover Code
"Effective Date" the date on which either the Scheme becomes effective in accordance with its
terms or, if BidCo elects, and the Panel consents, to implement the
Acquisition by way of a Takeover Offer, the date on which such Takeover Offer
becomes or is declared unconditional in all respects
"Equity Commitment Letter" the equity commitment letter dated 16 April 2025 between FEIP II and BidCo as
described in paragraph 10 of this announcement
"Euroclear" Euroclear UK & International Limited
"Excluded Shares" any HEIT Shares at the Scheme Record Time which (if any) are:
(a) registered in the name of, or beneficially owned by, BidCo or
any other member of the BidCo Group or any of their respective nominees; or
(b) held by HEIT as treasury shares (within the meaning of the
Companies Act),
in each case at the relevant time;
"Existing Management Arrangements" the AIFM Agreement and Investment Advisory Agreement
"FCA" or "Financial Conduct Authority" the Financial Conduct Authority or any successor regulatory body
"FEIP II" Foresight Energy Infrastructure Partners II S.C.Sp
"Foresight" Foresight Group LLP
"Foresight Funds" FEIP II and Averon Park
"Forms of Proxy" the forms of proxy in connection with each of the Court Meeting and the
General Meeting, which shall accompany the Scheme Document
"FSMA" the Financial Services and Markets Act 2000, as amended from time to time
"Funding Agreement" the funding agreement dated 16 April 2025 between Blackmead and BidCo as
described in paragraph 10 of this announcement
"FY 2023" the financial year ended 31 October 2023
"FY 2024" the financial year ended 31 October 2024
"General Meeting" the general meeting of HEIT Shareholders to be convened in connection with the
Scheme to consider and, if thought fit, to approve the Resolution(s) (with or
without amendment), and including any adjournment, postponement or reconvening
thereof, notice of which is to be contained in the Scheme Document
"GW" gigawatt
"GWh" gigawatt hour
"Harmony Energy" Harmony Energy Limited
"Harmony Energy Advisors" or "Investment Advisor" Harmony Energy Advisors Limited, HEIT's investment adviser
"HEIT" Harmony Energy Income Trust plc
"HEIT Directors" or "HEIT Board" the directors of HEIT at the time of this announcement or, where the context
so requires, the directors of HEIT from time to time
"HEIT Group" HEIT and its subsidiary undertakings and, where the context permits, each of
them
"HEIT Shareholders" or "Shareholders" the holders of HEIT Shares
"HEIT Shares" the ordinary shares of £0.01 each in the capital of HEIT from time to time
"Investment Advisory Agreement" the investment advisory agreement dated 14 October 2021 between HEIT, the
Investment Advisor and JTC Global AIFM Solutions Limited
"IPO" initial public offering
"Latest Practicable Date" 15 April 2025, being the latest practicable date prior to the date of this
announcement
"London Stock Exchange" London Stock Exchange plc
"Long-Stop Date" 30 September 2025, or such later date as may be agreed by BidCo and HEIT (with
the Panel's consent and as the Court may approve (if such approval(s) are
required))
"Market Abuse Regulation" the Market Abuse Regulation (EU) No 596/2014 as it forms part of UK law by
virtue of the European Union (Withdrawal) Act 2018
"MW" megawatt
"MWh" megawatt hour
"NAV" net asset value
"Offer Period" the offer period (as defined by the Takeover Code) relating to HEIT, which
commenced on 17 March 2025
"Opening Position Disclosure" has the same meaning as in Rule 8 of the Takeover Code
"Overseas Shareholders" HEIT Shareholders (or nominees of, or custodians or trustees for HEIT
Shareholders) not resident in, or nationals or citizens, of the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"Panmure Liberum" Panmure Liberum Limited
"RBC Capital Markets" RBC Europe Limited, trading as RBC Capital Markets
"Registrar of Companies" the Registrar of Companies in England and Wales
"Regulatory Information Service" any information service authorised from time to time by the FCA for the
purpose of disseminating regulatory announcements
"Resolution(s)" the resolution(s) to be proposed to be passed at the General Meeting in
connection with the adoption of the Amended HEIT Articles and such other
matters as may be necessary to implement the Scheme
"Restricted Jurisdiction" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition is sent or made available to HEIT Shareholders in that
jurisdiction
"Scheme" or "Scheme of Arrangement" the proposed scheme of arrangement under Part 26 of the Companies Act between
HEIT and the HEIT Shareholders in connection with the Acquisition, with or
subject to any modification, addition or condition approved or imposed by the
Court and agreed by HEIT and BidCo
"Scheme Document" the document to be sent to HEIT Shareholders containing, amongst other things,
the Scheme and the notices convening the Court Meeting and the General Meeting
"Scheme Record Time" the time and date to be specified in the Scheme Document by reference to which
the entitlements of Scheme Shareholders under the Scheme will be determined,
expected to be 6.00 p.m. on the Business Day immediately prior to the
Effective Date
"Scheme Shareholders" the holders of Scheme Shares from time to time
"Scheme Shares" all HEIT Shares:
(a) in issue as at the date of the Scheme Document and which remain
in issue at the Scheme Record Time;
(b) (if any) issued after the date the Scheme Document, but at or
before the Voting Record Time and which remain in issue at the Scheme Record
Time; and
(c) (if any) issued at or after the Voting Record Time but at or
before the Scheme Record Time, either on terms that the original or any
subsequent holder thereof is bound by the Scheme, or in respect of which such
holders are, or shall have agreed in writing to be, so bound, and which remain
in issue at the Scheme Record Time,
in each case, other than any Excluded Shares
"SEC" the US Securities and Exchange Commission
"Seed Portfolio" the initial portfolio of five BESS development projects acquired by HEIT at
IPO
"Significant Interest" a direct or indirect interest in 30 per cent or more of the voting equity
share capital of an undertaking
"solar PV" solar photovoltaic
"Takeover Code" the City Code on Takeovers and Mergers, as amended from time to time
"Takeover Offer" should the Acquisition be implemented by way of a takeover offer as defined in
Chapter 3 of Part 28 of the Companies Act, the offer to be made by or on
behalf of BidCo to acquire the entire issued and to be issued ordinary share
capital of HEIT and, where the context admits, any subsequent revision,
variation, extension or renewal of such takeover offer
"Third Party" each of a central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental, administrative, fiscal or
investigative body, court, trade agency, association, institution,
environmental body, employee representative body or any other body or person
whatsoever in any jurisdiction
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"United States" or "US" the United States of America, its territories and possessions, any state of
the United States of America, the District of Columbia and all other areas
subject to its jurisdiction and any political sub-division thereof
"US Exchange Act" the United States Securities Exchange Act 1934, as amended from time to time
"Voting Record Time" the time and date to be specified in the Scheme Document by reference to which
entitlement to vote on the Scheme will be determined
"Wider BidCo Group" BidCo, its parent undertakings, including for the avoidance of doubt FEIP II,
Blackmead and Averon Park, subsidiary undertakings and associated undertakings
and any other body corporate, partnership, joint venture or person in which
BidCo and all such undertakings (aggregating their interests) have a
Significant Interest
"Wider HEIT Group" HEIT and associated undertakings and any other body corporate, partnership,
joint venture or person in which HEIT and such undertakings (aggregating their
interests) have a Significant Interest
For the purposes of this announcement, "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective meanings given
thereto by the Companies Act.
All references to "pounds", "pounds sterling", "Sterling", "£", "pence",
"penny" and "p" are to the lawful currency of the United Kingdom.
All references to "Euro", "EUR" and "€" are to the lawful currency of the
member states of the European Union that adopt a single currency in accordance
with the Treaty establishing the European Community as amended by the Treaty
on the European Union.
All the times referred to in this announcement are London times unless
otherwise stated.
References to the singular include the plural and vice versa.
All references to statutory provisions or law or to any order or regulation
shall be construed as a reference to that provision, law, order or regulation
as extended, modified, replaced or re-enacted from time to time and all
statutory instruments, regulations and order from time to time made thereunder
or deriving validity therefrom.
1 (#_ftnref1) The aggregate asset under management (AUM) figure of
approximately £13 billion represents the sum of the £12.2 billion of AUM as
announced in Foresight's trading update for the three months ended 31 December
2024 (released on 9 January 2025) and the additional £800 million to
Foresight Group's AUM announced on 28 January 2025.
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