Peel Group Tables 172.5p Cash Bid For Harworth Group

Harworth Group (LON: HWG), the UK regeneration and strategic land developer, has received a firm cash takeover offer of 172.5p a share from Peel Pepper (UK) Limited, a Peel Group vehicle, valuing the company at about £582.9m. Shares jumped almost 20% on the news.

HWG shares traded at 172.05p this morning, up 19.8% from yesterday’s close of 143.6p and just below the 172.5p offer price. The stock ranged between 170.4p and 177p in early trading, within its 52-week range of 116.8p to 188.75p.

The offer was announced this morning via RNS by Goodweather Holdings Limited, an existing Peel Group subsidiary that already holds about 29.96% of Harworth, on behalf of BidCo Peel Pepper. It is a Rule 2.7 firm cash offer, a binding bid under the UK Takeover Code, conditional on acceptances covering more than half of Harworth’s voting rights. Harworth’s independent board has not yet issued a recommendation. Rothschild & Co confirmed BidCo can fund the maximum £417.5m needed for full acceptance from its own cash resources.

The 172.5p price is a 20.1% premium to yesterday’s close, and premiums of 36.9% and 36.0% to Harworth’s one-month and three-month volume-weighted average prices, a broader benchmark that smooths short-term swings. Peel argued in the RNS that Harworth’s cash flow and net asset value growth have underperformed, citing a 9.5% rise in administrative expenses, a 58.2% jump in net interest costs, and a 7.0% fall in investment portfolio rental income in its last financial year, saying a private structure suits a capital-intensive land business better than a discounted public listing.

BidCo intends to delist Harworth from the London Stock Exchange if acceptances reach 75% of voting rights, and to compulsorily acquire remaining shares once acceptances hit 90%. Harworth’s formal board response and the Takeover Panel’s acceptance timetable will determine whether the deal proceeds.