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UK-listed land and property regeneration company Harworth Group has rejected a takeover proposal from its largest shareholder, Peel Holdings, saying the offer significantly undervalues the business. The cash proposal values Harworth at about £582.9 million (USD 787.15 million) and offers 172.5 pence per share for the stake Peel Holdings does not already own. Peel Group, controlled by British businessman John Whittaker, holds nearly 30% of Harworth. Harworth’s board said the proposal sought to exploit the difference between the company’s share price and the value of its assets. Harworth shares rose 1.1% to 180 pence during Friday trading, taking their gain since the offer was disclosed to 25%. The company said it remained focused on higher-return land and industrial projects and had approved plans in principle to reduce costs over the medium term.
Harworth Group has rejected a takeover proposal from its largest shareholder, Peel Holdings, saying the offer undervalues the UK land and property regeneration company. The proposal, which was disclosed earlier this week, values the London-listed company at approximately USD 787.15 million.
Peel Holdings, part of John Whittaker’s Peel Group, has offered 172.5 pence in cash for each Harworth share it does not already own. Peel Group holds nearly 30% of Harworth, making it the company’s largest shareholder.
Harworth’s board said the proposal fundamentally undervalued the business and argued that the offer was aimed at taking advantage of the difference between the company’s market valuation and the value of its underlying assets.
The rejection came as Harworth’s shares continued to trade above Peel Holdings’ proposed offer price. The stock was up 1.1% at 180 pence by 14:14 GMT on Friday, according to Reuters data. The shares had gained 25% since the takeover proposal was disclosed on Thursday.
Harworth, which is based in South Yorkshire, said it remained confident in its ability to generate long-term returns for shareholders. The company’s position indicates that its board believes its future prospects and underlying assets support a valuation above the level proposed by Peel Holdings.
The company is also directing investment towards land and industrial projects that it expects to generate higher returns. Harworth said it had already approved in principle plans to reduce costs over the medium term as part of its approach to improving returns.
The proposed takeover would have given Peel Holdings the opportunity to increase its ownership of Harworth beyond its existing near-30% holding. The cash offer applies only to the shares not already held by the group.
Harworth’s portfolio and business model are centred on land and property regeneration in the UK. Its board’s rejection means the proposed transaction will not proceed on the terms currently offered by Peel Holdings.
The development comes as Harworth’s share price has moved above the proposed 172.5 pence per share consideration. The market response has taken the stock to 180 pence, a level that is around 4.3% above Peel Holdings’ offer price.
Harworth said its focus remained on executing its investment strategy, particularly through higher-return land and industrial projects, while pursuing medium-term cost reductions. The company’s board will therefore continue to assess its performance and prospects independently of the current takeover proposal.
Source - Reuters
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