REG - Harmony Energy Inc. - Recommended Acquisition - Scheme Doc Publication

Harmony Energy Income TrustAnnouncement

15/04/2025 07:02

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RNS Number : 0630F  Harmony Energy Income Trust PLC  15 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 SUCH JURISDICTION.

 

FOR IMMEDIATE RELEASE

 

15 April 2025

 

 

RECOMMENDED CASH ACQUISITION

 

of

 

Harmony Energy Income Trust plc ("HEIT")

 

by

 

Drax BESS Holdco Limited ("Drax Bidco")

 

to be implemented by means of a Court-sanctioned scheme of arrangement

under Part 26 of the Companies Act 2006

 

PUBLICATION OF SCHEME DOCUMENT

 

On 25 March 2025, the boards of directors of HEIT and Drax Bidco announced
that they had reached agreement on the terms of a recommended cash
acquisition, pursuant to which Drax Bidco, a wholly-owned subsidiary
undertaking of Drax Group plc ("Drax"), will acquire the entire issued
ordinary share capital of HEIT, to be implemented by way of Court-sanctioned
scheme of arrangement under Part 26 of the Companies Act (the "Scheme").

 

Publication of the Scheme Document

HEIT is pleased to announce that a circular relating to the Scheme (the
"Scheme Document") has been published today, setting out, among other things,
a letter from the Chair of HEIT, the full terms and conditions of the Scheme,
an explanatory statement from Panmure Liberum Limited ("Panmure Liberum"), an
expected timetable of principal events, notices of the Court Meeting and the
General Meeting and details of the action to be taken by Scheme Shareholders
and HEIT Shareholders.

 

The Scheme Document will be published on HEIT's website at
www.heitp.co.uk/investors/proposed-offer-from-drax
(http://www.heitp.co.uk/investors/proposed-offer-from-drax) and subject to any
restrictions relating to persons resident in Restricted Jurisdictions, hard
copies of the Scheme Document (or, depending on a HEIT Shareholder's
communication preference, a letter or email giving details of the website
where the Scheme Document may be accessed) and Forms of Proxy for the Court
Meeting and the General Meeting are being sent to HEIT Shareholders today and,
being made available to other persons with information rights (for information
purposes only).

 

Capitalised terms used in this announcement (the "Announcement") shall, unless
otherwise defined, have the same meanings as set out in the Scheme Document.
All references to times in this Announcement are to London, United
Kingdom times unless stated otherwise.

 

Summary of the terms of the Acquisition and the Scheme

The Acquisition will be implemented by the acquisition of the Scheme Shares by
Drax Bidco pursuant to a scheme of arrangement between HEIT and the Scheme
Shareholders under Part 26 of the Companies Act.

Under the terms of the Acquisition, which is subject to the Conditions and
further terms set out in the Scheme Document, each Scheme Shareholder at the
Scheme Record Time will be entitled to receive:

for each Scheme Share: 88.0 pence in cash (the "Offer Price")

The Acquisition values the entire issued share capital of HEIT at
approximately £199.9 million and the Offer Price represents:

·              a premium of approximately 35 per cent. to the
Closing Price of 65.2 pence per HEIT Share on 14 March 2025 (being the last
Business Day prior to the commencement of the Offer Period);

·              a premium of approximately 11 per cent. to the
Closing Price of 79.2 pence per HEIT Share on 24 March 2025 (being the last
Business Day prior to the date of the Announcement);

·              a premium of approximately 84 per cent. 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); and

·              a discount of approximately 5 per cent. to the 31
January 2025 unaudited NAV per HEIT Share of 92.4 pence.

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 Code.

 

The HEIT Directors believe that the Acquisition (including the Scheme) is in
the best interests of HEIT Shareholders as a whole and unanimously recommend
that the Scheme Shareholders vote in favour of the Scheme at the Court Meeting
and HEIT Shareholders vote in favour of the Special Resolution 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), as
they have irrevocably undertaken to do in respect of their own beneficial
holdings of, in aggregate, 101,116 HEIT Shares (representing, in aggregate,
approximately 0.04 per cent. of the issued ordinary share capital of HEIT as
at the Latest Practicable Date).

 

 

Notices of the Court Meeting and General Meeting and action to be taken

The Scheme will require approval by Scheme Shareholders at the Court Meeting,
being the meeting of Scheme Shareholders convened with the permission of the
Court to be held at 10.00 a.m. on 7 May 2025 at the offices of Gowling WLG
(UK) LLP, 4 More London Riverside, London SE1 2AU. Implementation of the
Scheme will also require approval of the Special Resolution relating to the
Acquisition to be proposed at the General Meeting. The General Meeting will be
held at the same place as the Court Meeting on 7 May 2025 at 10.15 a.m. (or as
soon thereafter as the Court Meeting has concluded or adjourned).

 

Notices of the Meetings are set out in the Scheme Document. If the Scheme
becomes Effective, it will be binding on all Scheme Shareholders, including
any Scheme Shareholders who were not eligible to vote, who did not vote or who
voted against the Scheme at the Court Meeting.

 

IT IS IMPORTANT THAT, FOR THE COURT MEETING IN PARTICULAR, AS MANY VOTES AS
POSSIBLE ARE CAST (WHETHER IN PERSON OR BY PROXY) SO THAT THE COURT MAY BE
SATISFIED THAT THERE IS A FAIR REPRESENTATION OF SCHEME SHAREHOLDER OPINION.
WHETHER OR NOT YOU INTEND TO ATTEND THE MEETINGS, YOU ARE THEREFORE STRONGLY
ENCOURAGED TO SIGN AND RETURN YOUR FORMS OF PROXY BY POST OR APPOINT A PROXY
ELECTRONICALLY ONLINE AT WWW.INVESTORCENTRE.CO.UK/EPROXY
(http://WWW.INVESTORCENTRE.CO.UK/EPROXY) , THROUGH CREST OR (FOR INSTITUTIONAL
INVESTORS) VIA THE PROXYMITY PLATFORM AS SOON AS POSSIBLE, BUT IN ANY EVENT SO
AS TO BE RECEIVED BY COMPUTERSHARE NOT LATER THAN 10.00 A.M. ON 2 MAY 2025 IN
THE CASE OF THE COURT MEETING AND NOT LATER THAN 10.15 A.M. ON 2 MAY 2025 IN
THE CASE OF THE GENERAL MEETING OR, IN THE CASE OF ANY ADJOURNMENT, NOT LATER
THAN 48 HOURS BEFORE THE TIME FIXED FOR THE ADJOURNED MEETING (EXCLUDING ANY
PART OF SUCH 48 HOUR PERIOD FALLING ON A NON-WORKING DAY), AND ARE FURTHER
STRONGLY ENCOURAGED TO APPOINT "THE CHAIR OF THE MEETING" AS YOUR PROXY IN
CONNECTION WITH THE MEETINGS.

 

Timetable

The Scheme Document contains an expected timetable of principal events
relating to the Scheme, which is also set out in the Appendix to this
Announcement. Subject to obtaining the approval of the requisite majority of
eligible Scheme Shareholders at the Court Meeting, the requisite majority of
HEIT Shareholder at the General Meeting and the satisfaction or waiver of the
other Conditions set out in the Scheme Document, including the sanctioning of
the Scheme by the Court, it is currently expected that the Effective Date will
be 17 June 2025.

 

Cancellation of trading in HEIT Shares

The last day of dealings in HEIT Shares for normal settlement on the London
Stock Exchange's main market for listed securities is expected to be the
Business Day immediately prior to the Court Sanction Hearing, and the last day
for registration of transfers of HEIT Shares (other than the registration of
the transfer of the Scheme Shares to Drax Bidco pursuant to the Scheme) is
expected to be the Business Day immediately prior to the Effective Date,
following which all HEIT Shares will be suspended from trading on the
specialist fund segment of the London Stock Exchange's main market for listed
securities.

 

Prior to the Scheme becoming Effective, HEIT will apply for the cancellation
of the admission to trading of the HEIT Shares on the specialist fund segment
of the London Stock Exchange's main market for listed securities. It is
expected that such cancellation of admission to trading will take effect on
the first Business Day after the Effective Date or shortly thereafter.

 

Information for HEIT Shareholders

In accordance with Rule 26.1 of the Code, copies of this Announcement and the
Scheme Document will be available on HEIT's website at
www.heitp.co.uk/investors/proposed-offer-from-drax
(http://www.heitp.co.uk/investors/proposed-offer-from-drax)  and on Drax
Bidco's website at /www.drax.com/investors/offer/
(https://www.drax.com/investors/offer/) no later than 12 noon on the Business
Day following the Announcement, up to and including the Effective Date. For
the avoidance of doubt, the contents of these websites is not incorporated by
reference and does not form part of this Announcement.

 

For information purposes only, the Scheme Document will also be sent, or made
available to, persons with information rights.

 

A copy of the Scheme Document will also be submitted to the National Storage
Mechanism, where it will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .

 

Shareholder Helpline

If you have any questions about this Announcement, the Scheme Document, the
Court Meeting or the General Meeting, or are in any doubt as to how to submit
your proxies electronically online at www.investorcentre.co.uk/eproxy
(http://www.investorcentre.co.uk/eproxy) , through CREST or (for institutional
investors) via the Proxymity platform or to complete the Forms of Proxy,
please call HEIT's registrar, Computershare, on +44 (0) 370 703 6003. Lines
are open from 8.30 a.m. to 5.30 p.m., Monday to Friday (excluding public
holidays in England and Wales). Calls are charged at the standard geographic
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, or provide advice on the
merits of the Acquisition or the Scheme, and calls may be recorded and
monitored for security and training purposes.

 

Enquiries:

 

 Drax and Drax Bidco

 Enquiries:

 Drax Investor Relations:

 Mark Strafford

 mark.strafford@drax.com

 +44 (0)77 3076 3949

 Chris Simpson

 Chris.Simpson@drax.com (mailto:Chris.Simpson@drax.com)

 +44 (0)79 2325 7815

 Media:

 Drax External Communications:

 Chris Mostyn

 Chris.Mostyn@drax.com

 +44 (0)77 4396 3483

 J.P. Morgan Cazenove (Financial Adviser and Corporate Broker to Drax and Drax  +44 (0)20 3493 8000
 Bidco)

 Robert Constant

 James Robinson

 Alia Malik

 Rupert Budge

 Edward Hatter

 FTI Consulting (PR Adviser to Drax and Drax Bidco)

 Kate Brader                                                                    +44 (0)79 2918 1850

 Senior Managing Director / Partner                                             +44 (0)20 3727 1539

 FTI Consulting

 kate.brader@fticonsulting.com

 HEIT                                                                           Via Panmure Liberum Limited

 Norman Crighton, Chairman

 Panmure Liberum (Financial Adviser, Rule 3 Adviser and Joint Broker to HEIT)   +44 (0)20 3100 2222

 Corporate Finance:

 Chris Clarke

 Darren Vickers

 Will King

 M&A:

 Tim Medak

 Stifel (Joint Broker to HEIT)                                                  +44 (0)20 7710 7600

 Mark Young

 Edward Gibson-Watt

 Rajpal Padam

 Mark Whitfeld

 Camarco (PR Adviser to HEIT)                                                   +44 (0)20 3757 4980

 Eddie Livingstone-Learmonth

 Andrew Turner

 

Gowling WLG (UK) LLP is acting as legal adviser to HEIT, and Pinsent Masons
LLP is acting as legal adviser to Drax Bidco and Drax, in connection with the
Acquisition.

 

 

Appendix

Expected timetable of principal events

 

 Event                                                                           Time and/or date(1)
 Publication of this Document                                                    15 April 2025
 Latest time for lodging Forms of Proxy or submitting proxy instructions online
 at www.investorcentre.co.uk/eproxy (http://www.investorcentre.co.uk/eproxy) ,
 through CREST or (for institutional investors) via the Proxymity platform for
 the:
 Court Meeting (blue form)                                                       10.00 a.m. on 2 May 2025(2)
 General Meeting (white form)                                                    10.15 a.m. on 2 May 2025(3)
 Voting Record Time for the Court Meeting and the General Meeting                6.30 p.m. on 2 May 2025(4)
 Court Meeting                                                                   10.00 a.m. on 7 May 2025
 General Meeting                                                                 10.15 a.m. on 7 May 2025(5)
 The following dates and times associated with the Scheme are indicative only
 and are subject to change.(1)
 Event                                                                           Time and/or date(1)
 Last day of dealings in HEIT Shares for normal settlement                       12 June 2025
 Court Sanction Hearing                                                          13 June 2025
 Last day for the registration of transfers of HEIT Shares                       16 June 2025
 Scheme Record Time                                                              6.00 p.m. on 16 June 2025
 Disablement in CREST of HEIT Shares                                             6.00 p.m. on 16 June 2025
 Suspension of dealings in HEIT Shares                                           7.30 a.m. on 17 June 2025
 Effective Date of the Scheme                                                    17 June 2025
 Cancellation of trading of HEIT Shares on the specialist fund segment of the    By 8.00 a.m. on 18 June 2025
 London Stock Exchange's main market for listed securities
 Latest date for despatch of cheques, making of electronic payments and          Within 14 days of the Effective Date
 crediting of CREST accounts for cash consideration due under the Acquisition
 Long Stop Date((6))                                                             31 July 2025

 

Notes:

(1) The dates and times given are indicative only and are based on current
expectations and are subject to change. References to times are to London,
United Kingdom time unless otherwise stated. If any of the times and/or dates
above change, the revised times and/or dates will be notified to HEIT
Shareholders by announcement through a Regulatory Information Service.

(2) It is requested that blue Forms of Proxy for the Court Meeting be lodged
by 10.00 a.m. on 2 May 2025 or, if the Court Meeting is adjourned, by no later
than 48 hours prior to the time fixed for the adjourned Court Meeting
(excluding any part of such 48 hour period falling on a non-working day in the
UK). Blue Forms of Proxy not so lodged can be handed to the Chair of the Court
Meeting (or Computershare on the Chair's behalf) at the start of the Court
Meeting or any adjournment thereof.

(3) In order to be valid, white Forms of Proxy for the General Meeting must be
received by Computershare by 10.15 a.m. on 2 May 2025 or, if the General
Meeting is adjourned, 48 hours prior to the time appointed for the adjourned
General Meeting (excluding any part of such 48 hour period falling on a
non-working day in the UK). If the white Form of Proxy is not lodged by the
relevant time, it will be invalid.

(4) If either the Court Meeting or the General Meeting is adjourned, the
Voting Record Time for the relevant adjourned Meeting will be 6.30 p.m. on the
day which is two Business Days prior to the date of the adjourned Meeting.

(5) Or as soon thereafter as the Court Meeting concludes or is adjourned.

(6) This is the latest date by which the Scheme may become Effective. However,
the Long Stop Date may be extended to such later date: (i) as may be agreed in
writing by Drax Bidco and HEIT (with the Panel's consent if required and (if
required) as the Court may allow); or (ii) at the direction of the Panel under
the Note on Section 3 of Appendix 7 to the Code.

 

Important notices

J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United
Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA.
J.P. Morgan Cazenove is acting as financial adviser exclusively for Drax Bidco
and Drax and no one else in connection with the matters set out in this
Announcement and will not regard any other person as its client in relation to
the matters in this Announcement and will not be responsible to anyone other
than Drax Bidco and Drax for providing the protections afforded to clients of
J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation
to any matter referred to herein.

 

Panmure Liberum Limited ("Panmure Liberum"), which is authorised and regulated
by the FCA 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 FCA 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.

 

Further information

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), contains (or will 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). HEIT and Drax Bidco urge HEIT Shareholders to read the Scheme
Document carefully because it contains important information relating to the
Acquisition.

 

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 is an advertisement and does not constitute a prospectus or
a 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 independent financial adviser duly
authorised under FSMA if you are resident in the United Kingdom or, if not,
from another appropriately authorised independent financial adviser.

 

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with English
law, the 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 jurisdictions outside England and Wales. The
Acquisition will be subject to the applicable requirements of the Code, the
Panel, the London Stock Exchange and the FCA.

 

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. 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 Drax Bidco or required by the 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 Acquisition 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.

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. Doing so may render invalid any
related purported vote in respect of, or acceptance of, the Acquisition.

 

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 availability of the Acquisition to HEIT Shareholders who are not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any applicable
requirements.

 

Further details in relation to Overseas Shareholders are contained in the
Scheme Document.

 

Additional Information for HEIT Shareholders resident in the United States

HEIT Shareholders resident in the United States should note that the
Acquisition relates to the shares of an English company and is being made by
means of a scheme of arrangement provided for under, and governed by, the law
of England and Wales. 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 Securities Exchange Act of 1934, as amended (the "US
Exchange Act"). Accordingly, the Acquisition is subject to the disclosure and
procedural requirements and practices applicable in the United Kingdom to
schemes of arrangement which differ from the disclosure requirements of United
States tender offer and proxy solicitation rules. If, in the future, Drax
Bidco exercises the right to implement the Acquisition by way of a Takeover
Offer and determines to extend the Takeover Offer into the United States, the
Acquisition will be made in compliance with applicable United States laws and
regulations, including Section 14(e) of the US Exchange Act and Regulation 14E
thereunder. Any such Takeover Offer would be made in the United States by Drax
Bidco and no one else.

 

Financial information included in this Announcement and the Scheme Document
has been prepared in accordance with accounting standards under UK-adopted
international accounting standards and in accordance with International
Financial Reporting Standards ("IFRS") and thus may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in
the United States.

 

The receipt of cash pursuant to the Acquisition by a US holder of HEIT Shares
as consideration for the transfer of its Scheme Shares pursuant to the Scheme
may be a taxable transaction for US federal income tax purposes and under
applicable US state and local, as well as foreign and other, tax laws. Each
HEIT Shareholder is therefore urged to consult with independent legal, tax and
financial advisers in connection with making a decision regarding the
Acquisition.

 

Drax Bidco and HEIT are each organised and located in a non-US jurisdiction
and some or all of their officers and directors may be residents of a non-US
jurisdiction. It may therefore be difficult for holders of HEIT Shares located
in the United States to enforce their rights and any claim arising out of US
securities law. It may not be possible to sue Drax Bidco and HEIT (or their
officers and directors) in a non-US court for violations of US securities
laws. Furthermore, it may be difficult to compel Drax Bidco and HEIT and their
respective affiliates to subject themselves to the jurisdiction or judgment of
a US court.

 

In accordance with normal UK practice and to the extent permitted under Rule
14e-5(b) of the US Exchange Act, Drax Bidco, certain affiliated companies and
their nominees or brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, HEIT Shares outside of the
United States, other than pursuant to the Acquisition, until the Effective
Date, lapses or is otherwise withdrawn. If such purchases or arrangements to
purchase were to be made they would occur either in the open market at
prevailing prices or in private transactions at negotiated prices and comply
with applicable law, including English law, the Code and the US Exchange Act.
Any information about such purchases will be disclosed as required in the UK,
will be reported to the Regulatory News Service of the London Stock Exchange
and will be available on the London Stock Exchange website at
https://www.londonstockexchange.com/ (https://www.londonstockexchange.com/) .

 

Neither this Announcement nor the Scheme Document constitutes or forms a part
of any offer to sell or issue, or any solicitation of any offer to purchase,
subscribe for or otherwise acquire, any securities in the United States.

 

Neither the US Securities and Exchange Commission nor any securities
commission of any state of the United States has approved or disapproved the
Acquisition, passed upon the fairness of the Acquisition, or passed upon the
adequacy or accuracy of this Announcement or the Scheme Document. Any
representation to the contrary is a criminal offence in the United States.

 

Further details in relation to US investors in HEIT are contained in the
Scheme Document.

 

Forward looking statements

The information provided in this Announcement and the Scheme Document contains
certain forward-looking statements and information (collectively,
"forward-looking statements") within the meaning of applicable securities
laws. Such forward-looking statements include, without limitation, forecasts,
estimates, expectations and objectives for future operations that are subject
to assumptions, risks and uncertainties, many of which are beyond the control
of Drax Bidco or HEIT. Forward-looking statements are predictive in nature,
depend upon or refer to future events or conditions, or include words such as
"expect", "plan", "anticipate", "believe", "intend", "maintain", "continue
to", "pursue", "design", "result in", "sustain" "estimate", "potential",
"growth", "near-term", "long-term", "forecast", "contingent" and similar
expressions, or are events or conditions that "will", "would", "may", "could"
or "should" occur or be achieved. The forward-looking statements contained in
this Announcement and the Scheme Document speak only as of the date hereof and
are expressly qualified by this cautionary statement.

 

Forward-looking statements are based upon, among other things, factors,
expectations and assumptions that Drax Bidco and HEIT have made as at the date
of this Announcement regarding, among other things: the satisfaction of the
conditions to closing of the Acquisition in a timely manner, if at all,
including the receipt of all necessary approvals; and that the Acquisition
will comply with all applicable requirements of the Code, the Panel, the
London Stock Exchange and the FCA.

 

Undue reliance should not be placed on the forward-looking statements because
no assurance can be given that they will prove to be correct. Since
forward-looking statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. These risks include, but
are not limited to: the completion and timing of the Acquisition; the ability
of Drax Bidco and HEIT to receive, in a timely manner, the necessary
regulatory, Court, shareholder, stock exchange and other third-party approvals
and to satisfy the other conditions to closing of the Acquisition; the ability
of the parties to complete the Acquisition on the terms contemplated by Drax
Bidco and HEIT or at all; consequences of not completing the Acquisition,
including the volatility of the share prices of Drax and HEIT, negative
reactions from the investment community, and the required payment of certain
costs related to the termination of the Acquisition; and the focus of
management's time and attention on the Acquisition and other disruptions
arising from the Acquisition.

 

Except as may be required by applicable securities laws, neither Drax Bidco
nor HEIT assume any obligation or intent to update publicly or revise any
forward-looking statements made in this Announcement or the Scheme Document,
whether as a result of new information, future events or otherwise.

 

No profit forecasts, profit estimates or quantified financial benefit
statement

No statement in this Announcement or the Scheme Document is intended as a
profit forecast, profit estimate or quantified financial benefit statement for
any period and no statement in this Announcement or the Scheme Document should
be interpreted to mean that earnings or earnings per share for Drax 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
Drax or HEIT, as appropriate.

 

Right to switch to Takeover Offer

Drax Bidco reserves the right to elect to implement the Acquisition by way of
a Takeover Offer as an alternative to the Scheme (subject to the Panel's
consent).

 

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. 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 Code, any person who is, or becomes, interested in 1
per cent. 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, 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 Drax Bidco during the offer period as requested under Section 4 of Appendix
4 of the Code to comply with Rule 2.11(c) of the Code.

 

Publication on website and availability of hard copies

A copy of this Announcement, the Scheme Document and the documents required to
be published pursuant to Rules 26.1 and 26.2 of the Code will be made
available, free of charge, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on Drax's and HEIT's websites at
www.drax.com/investors/offer and
www.heitp.co.uk/investors/proposed-offer-from-drax respectively by no later
than 12 noon (London time) on 16 April 2025. For the avoidance of doubt, the
contents of these websites are not incorporated into and do not form part of
this Announcement or the Scheme Document.

 

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
BS13 8AE or by calling them on +44 (0)370 703 6003 during business hours
(lines are open from 8.30 a.m. to 5.30 p.m., 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 and the Scheme Document 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.

 

Rule 2.9 Disclosure

In accordance with Rule 2.9 of the Code, HEIT confirms that as at the date of
this announcement, it has in issue and admitted to trading on the main market
of the London Stock Exchange 227,128,295 ordinary shares of £0.01 each
(excluding any shares held in treasury). Accordingly, the total number of
voting rights in HEIT is 227,128,295. The International Securities
Identification Number (ISIN) of the ordinary shares is GB00BLNNFY18.

 

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