Peel Pushes £583m Harworth Bid After Rejection

A rejected offer refuses to go away

A hostile takeover battle over Rotherham-based land regeneration company Harworth Group escalated on Wednesday, as majority shareholder Peel Holdings formally pressed ahead with its £583 million cash offer despite the target's board having unanimously rejected the approach just weeks earlier.

Peel, which operates through its subsidiary Peel Pepper (UK) and already controls just under 30 per cent of Harworth's shares via another arm of the group, Goodweather Holdings, has now published a full offer document setting out the terms of its bid. Under the proposal, Harworth shareholders would receive 172.5 pence in cash per share, valuing the entire business at approximately £583 million.

The offer represents a premium of around 20 per cent to Harworth's share price immediately before the approach became public, and a considerably larger premium — reported at up to 37 per cent — when measured against the company's average share price over the preceding one and three-month periods.

Harworth's board holds firm

Harworth's board has been unequivocal in its opposition. When the initial approach was made public, directors described themselves as "unanimous and unequivocal" in rejecting the offer, arguing it fundamentally undervalues both the company and its long-term prospects. The board went further, suggesting the timing of Peel's approach was opportunistic, designed to exploit what it called a material gap between Harworth's share price and the true value of its underlying property assets — a dislocation it attributes primarily to broader macroeconomic pressures rather than any weakness specific to the business.

Central to Harworth's defence is its industrial and logistics portfolio, which spans some 35 million square feet, alongside what the company describes as substantial embedded value in its 0.8 gigawatt power-enabled land bank that has yet to be fully realised. The company points to an average total accounting return of 8.1 per cent over the past five years as evidence that its long-term strategy is working, and has confirmed it is in advanced negotiations over a second major hyperscale data centre transaction, alongside growing momentum across its wider industrial and logistics pipeline.

In response to the approach, the board has already approved, in principle, a medium-term business plan involving cost reductions, which it argues will create a simpler, lower-cost and higher-returning platform capable of delivering sustainable growth for shareholders independently of any takeover.

Peel makes its counter-case

Peel, which is majority-owned by Manchester businessman John Whittaker, has pushed back forcefully against Harworth's rejection, arguing that the company's financial position is less secure than its board suggests. In its formal offer document, Peel points to rising administrative expenses and increasing net finance costs at Harworth — which it says reached £47 million in the last financial year — as evidence that the group's cash flow profile is becoming steadily less sustainable, since these costs now significantly outstrip Harworth's recurring rental income.

Peel has also questioned whether Harworth can realistically meet its own growth targets, arguing that achieving the return levels implied by the company's stated ambitions would require roughly 8 per cent annual growth in its net disposal value — a rate significantly higher than Harworth has managed over the past four years. The firm further argues that Harworth's strategy of directly developing and holding assets is overly capital-intensive and slow to generate shareholder value, suggesting the business would be better served by a leaner focus on strategic land and selective development under private ownership, free from the costs associated with a public listing.

Peel has also noted that Harworth has not raised new equity in nine years, and argues that given the company's persistent share price discount to net asset value, raising fresh equity accretively today would be extremely difficult — an argument the firm believes strengthens the case for its offer.

A shareholder battle now begins in earnest

With the formal offer document now published, Peel has until 25 October to secure sufficient shareholder acceptances for the bid to succeed. Given Peel's existing near-30 per cent stake, the coming weeks are likely to see an intense lobbying effort on both sides as institutional and retail investors weigh Harworth's growth pipeline against the certainty of an immediate cash exit.

The dispute has drawn wider attention within the UK real estate sector, both for its size and for what it reveals about tensions between long-term strategic investors and public shareholders during a period when many property companies have traded at persistent discounts to the underlying value of their assets. Harworth's board has indicated it will continue writing formally to shareholders to set out its case against the offer as the process unfolds.

For now, neither side shows any sign of backing down. Harworth insists its current strategy, including its expanding data centre and industrial land pipeline, will ultimately deliver greater value than Peel's cash offer. Peel, meanwhile, is betting that shareholders frustrated by years of share price underperformance will prefer certainty today over the promise of returns still to come.