Harworth contemplates surprise takeover offer from largest shareholder

Harworth Group PLC on Thursday "strongly advised" shareholders to "take no action" after an unsolicited takeover offer from a subsidiary of its largest shareholder, Peel Holdings Group Ltd.

Peel announced the all-cash offer before the London market open, and Harworth shares were up 22% in response to 174.60 pence late on Thursday morning in London.

Peel Pepper (UK) Ltd, the Peel subsidiary making the bid together with another subsidiary, is offering Harworth shareholders 172.5p in cash per share, valuing the Rotherham, England-based land regeneration company's share capital at £582.9 million.

Another Peel subsidiary, Goodweather Holdings Ltd, and others acting concert with it, hold 97.9 million Harworth shares or a 29.96% stake, Peel noted. In Harworth's 2025 annual report, it showed Goodweather as its largest shareholder at 29.32%, ahead of London & Amsterdam Trust Co at 26.11%.

"The Peel group is a long-term investor in Harworth, having held various ownership interests in Harworth over a number of years," Peel said. "Having regard to the Peel group's existing platform and capabilities, the Peel Holdings directors believe that Harworth's assets would be best owned, managed and developed under the full control of Peel Holdings."

Explaining its claim, Peel argued that Harworth's cash flow profile is becoming less sustainable, partly due to "Harworth's increasing administrative cost base and increasing net interest expense, which are significantly higher than its recurring rental income," and noted that Harworth's first-half EPRA net disposal value is expected to be below December 31 levels.

Harworth on Wednesday had said it expects its EPRA NDV as of June 30 to be "modestly" lower compared with December 31, when it was £727.3 million or 224.4p per share.

Peel said it believes that Harworth is "highly unlikely" to achieve its NDV target growth rate, as this would require NDV growth of approximately 8% per year. This rate is "significantly higher than Harworth's historic returns over the last four years and Harworth's annual overhead cost and interest expense will continue to materially impact its NDV returns going forward," Peel said.

Additionally, Peel "considers Harworth's direct development and hold strategy to be capital-intensive, slow to deliver value and increasingly unable to generate appropriate risk-adjusted returns...The business should pivot toward strategic land activities and selective development, a model that has a lower cost base and is more effectively executed within a private-company structure."

It added that Harworth's stock exchange listing "provides limited benefit", as Harworth "has not raised new equity in the last nine years, and [Peel Pepper] believes Harworth would not be able to raise new equity accretively today given its consistent discount."

Responding to the "unsolicited firm offer" later on Thursday morning, Harworth said: "The board has had no substantive engagement with Peel Pepper or Peel about any offer before their announcement today."

Harworth is reviewing the offer terms with its advisers, and intends to make a further announcement "as appropriate".

"In the meantime, shareholders are strongly advised to take no action," the company added.

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