News: At £631.7m, Harworth agrees to Peel deal
The board of Harworth, the Rotherham-based regenerator of land and property for sustainable development and investment, has recommended a best and final takeover offer from major shareholder Peel Holdings, valuing the company at £631.7m.
Rothbiz reported last month on the initial cash offer worth £582.88m at 172.5p per share that was dismissed, along with a follow up bid at 177.5p. The board argued that those attempts significantly undervalued the business and its standalone growth potential.
Having acquired Harworth shares and passing the 30% mark, Peel Pepper (UK) Limited (part of the wider Peel Group) returned with an increased cash offer of 187p per share which has now gained the unanimous recommendation of the Harworth board.
Created from what was UK Coal, Harworth Group owns, develops, and manages a portfolio of over 15,000 acres of strategic land over 100 sites located throughout the North of England and Midlands. With a focus on Grade A industrial and logistics (I&L) space and emerging opportunities in the data centre market, the company has a target of £1bn of EPRA NDV - EPRA NDV is how Harworth measures the value of its assets.
Manchester's The Peel Group is a long-term investor in Harworth, having held various ownership interests in Harworth over a number of years. The Peel Holdings directors believe that Harworth's assets would be best owned, managed and developed under the full control of Peel Holdings.
An update to the stock exchange read: "While the Harworth Board has confidence in the Group’s standalone strategy and future potential, the recommendation follows careful consideration of the Best and Final Offer and engagement with Harworth Shareholders."
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Peel believes that the bid is a "highly attractive and certain cash solution at a full valuation, against the alternative of an investment in Harworth, which has an increasingly uncertain outlook, and an unsuitable public company structure from which to deliver the strategic change that BidCo [Peel] believes is required."
Harworth's statement added: "The Harworth Board believes that the Best and Final Offer is in the best interests of all Harworth Shareholders, as it accelerates shareholder returns that could be delivered from, and removes the execution risk associated with, the strategic plan that Harworth would pursue independently."
In the earlier bid document, Peel said that Harworth's administrative expenses and net interest expenses are too high and increasing, whilst the investment portfolio's passing rental income has decreased. Harworth subsequently announced a strategy to reduce expenses and withdraw from the residential sector to focus on industrial and data centre development. Peel said that this strategy was "reactive and unsubstantiated."
Harworth recently moved into a new headquarters at its flagship Waverley development in Rotherham. Peel earlier said that it had "not yet determined whether any changes will be made to the location of Harworth's headquarters or headquarters functions, or to the locations of Harworth's other fixed places of business." Any changes would be considered as part of a review into Harworth's assets.
Peel's earlier document also said it would de-list the business from the stock exchange and on jobs, the announcement said: "Following the Offer becoming or being declared unconditional, BidCo expects to review overlapping functions across the Harworth Group, including senior management, corporate, operational, finance, human resources, compliance and other support functions.
"Based on BidCo's preliminary assessment, the Offer is expected to result in a significant headcount reduction and synergies from overlapping functions and the elimination of costs associated with Harworth's status as a listed company. BidCo has not yet determined the number of roles likely to be affected, the timing of any reductions or the specific functions or locations in which any reductions may occur and will provide further information to affected employees in accordance with applicable legal and regulatory requirements."
Peel is expected to review Harworth's fixed asset base, including its strategic land bank and investment portfolio, and then intends to accelerate the disposal of selected assets.
Harworth Group website
The Peel Group website
Images: Sotech Architectural Facade Systems
Rothbiz reported last month on the initial cash offer worth £582.88m at 172.5p per share that was dismissed, along with a follow up bid at 177.5p. The board argued that those attempts significantly undervalued the business and its standalone growth potential.
Having acquired Harworth shares and passing the 30% mark, Peel Pepper (UK) Limited (part of the wider Peel Group) returned with an increased cash offer of 187p per share which has now gained the unanimous recommendation of the Harworth board.
Created from what was UK Coal, Harworth Group owns, develops, and manages a portfolio of over 15,000 acres of strategic land over 100 sites located throughout the North of England and Midlands. With a focus on Grade A industrial and logistics (I&L) space and emerging opportunities in the data centre market, the company has a target of £1bn of EPRA NDV - EPRA NDV is how Harworth measures the value of its assets.
Manchester's The Peel Group is a long-term investor in Harworth, having held various ownership interests in Harworth over a number of years. The Peel Holdings directors believe that Harworth's assets would be best owned, managed and developed under the full control of Peel Holdings.
An update to the stock exchange read: "While the Harworth Board has confidence in the Group’s standalone strategy and future potential, the recommendation follows careful consideration of the Best and Final Offer and engagement with Harworth Shareholders."
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Peel believes that the bid is a "highly attractive and certain cash solution at a full valuation, against the alternative of an investment in Harworth, which has an increasingly uncertain outlook, and an unsuitable public company structure from which to deliver the strategic change that BidCo [Peel] believes is required."
Harworth's statement added: "The Harworth Board believes that the Best and Final Offer is in the best interests of all Harworth Shareholders, as it accelerates shareholder returns that could be delivered from, and removes the execution risk associated with, the strategic plan that Harworth would pursue independently."
In the earlier bid document, Peel said that Harworth's administrative expenses and net interest expenses are too high and increasing, whilst the investment portfolio's passing rental income has decreased. Harworth subsequently announced a strategy to reduce expenses and withdraw from the residential sector to focus on industrial and data centre development. Peel said that this strategy was "reactive and unsubstantiated."
Harworth recently moved into a new headquarters at its flagship Waverley development in Rotherham. Peel earlier said that it had "not yet determined whether any changes will be made to the location of Harworth's headquarters or headquarters functions, or to the locations of Harworth's other fixed places of business." Any changes would be considered as part of a review into Harworth's assets.
Peel's earlier document also said it would de-list the business from the stock exchange and on jobs, the announcement said: "Following the Offer becoming or being declared unconditional, BidCo expects to review overlapping functions across the Harworth Group, including senior management, corporate, operational, finance, human resources, compliance and other support functions.
"Based on BidCo's preliminary assessment, the Offer is expected to result in a significant headcount reduction and synergies from overlapping functions and the elimination of costs associated with Harworth's status as a listed company. BidCo has not yet determined the number of roles likely to be affected, the timing of any reductions or the specific functions or locations in which any reductions may occur and will provide further information to affected employees in accordance with applicable legal and regulatory requirements."
Peel is expected to review Harworth's fixed asset base, including its strategic land bank and investment portfolio, and then intends to accelerate the disposal of selected assets.
Harworth Group website
The Peel Group website
Images: Sotech Architectural Facade Systems
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