Peel’s bid vehicle, Peel Pepper (UK) Limited, raised its cash offer for Harworth Group (LON: HWG), the land regeneration and property developer, to 177.5p a share earlier today, escalating its takeover battle for the company with a Response Presentation rebutting Harworth’s defence.
Harworth shares traded at 177.3p on Wednesday morning, up 0.3% from Tuesday’s close of 176.8p and now essentially level with Peel’s new offer price. That leaves the stock near the top of its 52-week range of 116.8p to 185p, having touched an intraday high of 179.82p.
The 177.5p offer is a 2.9% increase on Peel’s original 172.5p approach of the 6th of August, and comes a day after Harworth said it had identified £7.4m of annualised cost savings to bolster its case for staying independent. Peel’s Response Presentation dismissed the plan, saying Harworth “is facing significant operational and structural challenges, including declining net asset value (NAV), higher leverage, a capital constrained balance sheet, worsening cashflow, lower sales volumes, and a new strategy that lacks credibility in that context.”
The revised offer values Harworth at about £599.77m and represents a 23.6% premium to the 143.6p close on the 5th of August and roughly 40% above the three-month volume-weighted average price. That premium still leaves the offer below the 208.8p diluted EPRA net disposal value (NDV) per share, a measure of net asset value adjusted for the costs of a sale, that Harworth’s board reported at the end of June, after a first-half operating loss of £24.9m against a £7.1m profit a year earlier.
Harworth’s board rejected Peel’s original approach unanimously in a Defence Document published last Wednesday, setting out a pivot away from residential land towards industrial and logistics sites, and followed it yesterday with the cost-savings plan that Peel’s presentation now singles out as evidence the strategy still lacks credibility.
Shareholders have until 1pm on the 25th of October to accept, and Peel has said it would seek to delist Harworth from the Main Market if acceptances reach 75% of voting rights.