Peel Group ups offer for Harworth as it bids to take over fellow developer

Manchester’s Peel Group already owns around 30% of its Yorkshire counterpart but is bidding to take it over in a deal that would value the firm at around £600m

Development group Peel has increased its takeover offer for fellow Northern firm Harworth Group.

Peel’s offer of 177.5p per share for the parts of the company it does not already own values Rotherham-based Harworth at nearly £600m. Harworth said it would evaluate the new bid with its advisors, but recommended shareholders do nothing in the short term.

Peel already holds nearly 30% of Harworth’s shares, but launched a takeover bid in August through a subsidiary. Harworth said the first bid undervalued the company and last week announced a move away from the residential property market in efforts to streamline its operations.

Last week also saw Harworth publish half year results for the six months to the end of June in which EPRA NDV was £697.7m, compared with £725m in the same period last year. It also saw a £16.9m fall in the value of its residential portfolio over the period.

A spokesperson for Peel said: “Harworth’s defence document highlights rather than addresses the issues faced by the Company. It announced a further decline in NAV and cash flow, while remaining silent on the Company’s short-to-medium term outlook. Instead, it flags a new strategy lacking credibility but promising ‘long term’ returns for shareholders. Peel’s revised offer provides shareholders with the certainty at completion of a highly attractive cash alternative at a fair price and 40% premium.”

Harworth responded with a statement to the Stock Exchange which said: “There has been no engagement between Peel and Harworth over the course of the offer period. The Harworth board is evaluating the revised offer with its advisers and a further announcement will be made as appropriate.”

Harworth originated as the property wing of UK Coal, and many of its earliest properties were former mining sites in the North and the Midlands. It currently has holdings of more than 15,000 acres across 100 sites, and specialises in developing industrial and logistics developments for sale.