Increased Cash Offer and Response Presentation
Bidder Peel Pepper increases takeover offer for Harworth Group to 177.5 pence per share.
- Revised offer price per share 177.5 pence
- Equity value of revised offer approximately £599.77 million
- Premium to closing price (5 August 2026) 23.6%
- Premium to 1-month VWAP 40.9%
- Diluted EPRA NDV per share 208.8 pence
- NAV decline in 6 months 4.3%
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PEEL PEPPER (UK) Limited (Bidco), A COMPANY INDIRECTLY WHOLLY-OWNED BY PEEL HOLDINGS GROUP LIMITED
INCREASED CASH OFFER AND PUBLICATION OF RESPONSE TO THE DEFENCE DOCUMENT
BidCo today announces an increased cash offer of 177.5 pence for each Harworth Share (the "Revised Offer") and the publication of a presentation setting out BidCo's observations on the Defence Document (as defined below) to assist shareholders in assessing the Revised Offer (the "Response Presentation").
Introduction
On 26 August 2026, BidCo published an offer document (the "Original Offer Document") for the entire issued and to be issued share capital of Harworth (the "Offer") and an investor presentation setting out the strategic and financial rationale for the Offer (the "Investor Presentation").
On 9 September 2026, Harworth published a circular in response to the Original Offer Document (the "Defence Document"), in response to which BidCo published an announcement on the same day.
BidCo today announces the Revised Offer and the publication of the Response Presentation to assist shareholders in assessing the Revised Offer.
Further details of the Revised Offer will be set out in a revised offer document (the "Revised Offer Document"), which will be prepared and distributed to Harworth Shareholders.
Capitalised terms in this announcement, unless otherwise defined, have the same meanings as set out in the Original Offer Document.
BidCo's Revised Offer and Response Presentation
BidCo is today increasing its Offer to Harworth Shareholders to 177.5 pence. The Revised Offer provides shareholders with an attractive and certain cash solution (subject to completion) at a fair valuation and significant 40% premium, 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 believes is required.
Harworth's Defence Document only confirms the issues faced by the Company and the uncertainty of its outlook. In BidCo's view, as set out below and in the Response Presentation published today, Harworth is facing significant operational and structural challenges, including declining NAV, higher leverage, a capital constrained balance sheet, worsening cashflow, lower sales volumes, and a new strategy that lacks credibility in that context.
| · | Net asset value declined 4.3% in 6 months with diluted EPRA NDV per share now 208.8 pence including dilution from share options; |
| · | NAV is facing significant negative pressures going forwards: Gilt yields have worsened by c.30bps since 30 June 2026; UK industrial market yields are widening; and interest and administrative costs will continue to pressure NAV even with the programme to achieve cost savings; |
| · | Cash flow profile continues to deteriorate: rising debt levels, significantly lower sales volumes and elevated uncertainty on future disposals leads BidCo to believe that Harworth is capital constrained with limited ability to invest; |
| · | Cost savings quantified by Harworth only reverse two years of cost growth to 2023 levels; and administrative expenses and interest will remain significantly higher than rental income ; |
| · | Harworth is silent on the short- to medium-term outlook and silent on when and how it will reach its existing £1bn EPRA NDV target, instead announcing a new strategy and a new "low double-digit total accounting return" target in the longer-term, which lacks credibility; |
| · | In BidCo's view, the newly announced strategy raises a number of concerns: o fully exiting residential land into a challenging market may require significant discounts, leading to further NAV reductions; o new development targets are unrealistic based on Harworth's track record and capital availability; o the data centre strategy is deficient in detail, inconsistent, and any potential cash flows may not be realised until the mid-to-late 2030s; |
| · | BidCo's prior questions to Harworth have not been adequately addressed in the Defence Document; |
| · | BidCo's Revised Offer of 177.5 pence per share in cash at a 40% premium to the 3-month volume weighted average share price provides Shareholders with full liquidity for their entire shareholding and certainty of value in cash at completion: o Revised Offer premium of 40% is materially ahead of the transaction precedents quoted by Harworth on a 3-month volume-weighted average share price premium basis; o Market has declined by 10% since BidCo made the Offer; and o NAV discount comparison made by Harworth is irrelevant given the declining NAV and persistent and structural share price discount, which means shareholders may face a share price below the Revised Offer if it does not proceed. |
Revised Offer
Under the terms of the Revised Offer, which are subject to the further terms and conditions which shall be set out in further detail in the Revised Offer Document and, in respect of Harworth Shares held in certificated form, the second form of acceptance which will accompany the Revised Offer Document (the "Second Form of Acceptance"), BidCo is offering to acquire the Harworth Shares from Harworth Shareholders at a price of:
177.5 pence in cash for each Harworth Share
The Revised Offer values the entire issued and to be issued ordinary share capital of Harworth at approximately £599.77 million and represents a premium of approximately:
| ● | 23.6 per cent. to the Closing Price of 143.6 pence per Harworth Share on 5 August 2026 (being the last Business Day before the date of the commencement of the Offer Period); |
| ● | 40.9 per cent. to the volume-weighted average price of 126.0 pence per Harworth Share for the one-month period ended 5 August 2026 (being the last Business Day before the date of the commencement of the Offer Period); and |
| ● | 40.0 per cent. to the volume-weighted average price of 126.8 pence per Harworth Share for the three-month period ended 5 August 2026 (being the last Business Day before the date of the commencement of the Offer Period). |
The Revised Offer represents a 2.9 per cent. increase on the cash Offer announced on 6 August 2026.
Financing of the Revised Offer
BidCo's own cash resources will be used to fund the Revised Offer in full. No external financing arrangements have been entered into in connection with the Revised Offer. Rothschild & Co is satisfied that the necessary financial resources are available to BidCo to enable it to satisfy, in full, the consideration payable by BidCo under the terms of the Revised Offer.
Conditions to and further terms of the Revised Offer
Save as set out in this announcement, the Revised Offer is subject to the same terms and conditions as set out in Appendix 1 (Conditions and Further Terms of the Offer) of the Original Offer Document. The Revised Offer is a revision to the Offer and should be construed accordingly.
Intentions of BidCo and disclosures
BidCo confirms that the Revised Offer does not change its intentions as regards the business of Harworth, including as to its employees, management and pension schemes and locations, as detailed in paragraph 7 of Part 1 of the Original Offer Document (Intentions of BidCo with regard to Harworth's business, management, employees, pensions, fixed assets, headquarters and locations).
How to accept the Revised Offer
The Second Form of Acceptance will also be sent to Harworth Shareholders together with the Revised Offer Document. However, Harworth Shareholders who have already validly accepted the Original Offer will automatically be deemed to have accepted the terms of the Revised Offer by virtue of their prior acceptance. Such Harworth Shareholders therefore will not need to take any further action, and do not need to complete or return the Second Form of Acceptance or submit a further Electronic Acceptance.
The Revised Offer will extend to all issued Harworth Shares not otherwise held by BidCo or other wholly-owned subsidiaries of Peel Holdings and to any further Harworth Shares which are unconditionally allotted or issued and fully paid before the Revised Offer closes.
Harworth Shareholders who have not yet accepted the Revised Offer are urged to do so as soon as possible, and in any event, by no later than 1.00 p.m. (London time) on 25 October 2026 (or such later time(s) and/or date(s) as BidCo may, in accordance with the Takeover Code or with the consent of the Panel, decide).
If you hold your Harworth Shares, or any of them, in certificated form (that is, NOT in CREST), to accept the Revised Offer in respect of those Harworth Shares you should complete, sign and return (i) the first form of acceptance accompanying the Original Offer Document dated 26 August 2026, or (ii) the Second Form of Acceptance which will accompany the Revised Offer Document to be posted in due course.
If you hold your Harworth Shares, or any of them, in uncertificated form (that is, in CREST), to accept the Offer in respect of those Harworth Shares you should follow the procedure for Electronic Acceptance through CREST so that the TTE instruction settles as soon as possible.
Revised Offer Document
The Original Offer Document contains the terms and conditions to the Original Offer. The Revised Offer Document containing updates to those terms and conditions to reflect the Revised Offer and any material updates since the publication of the Original Offer Document will be sent to Harworth Shareholders as soon as reasonably practicable.
A copy of this announcement, the Response to the Defence Document, and the Revised Offer Document will be made available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on BidCo's website at www.peel.co.uk/investor-notice/details during the course of the Revised Offer.
Delisting, Cancellation and Compulsory Acquisition
If BidCo receives acceptances under the Revised Offer in respect of, and/or otherwise acquires or agrees to acquire, Harworth Shares carrying 75 per cent. or more of the voting rights of Harworth, BidCo intends to procure that Harworth applies to the FCA for the cancellation of the listing of Harworth Shares on the Official List and to the London Stock Exchange for the cancellation of admission to trading of Harworth Shares on the Main Market. Any such cancellation would significantly reduce the liquidity and marketability of any Harworth Shares not assented to the Revised Offer. It is anticipated that any cancellation would take effect no earlier than 20 Business Days after BidCo has acquired or agreed to acquire Harworth Shares carrying 75 per cent. or more of the voting rights of Harworth.
If BidCo receives acceptances under the Revised Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Harworth Shares to which the Revised Offer relates and assuming the other requirements of sections 974 to 991 of the 2006 Act are met, BidCo intends to exercise its rights to acquire compulsorily the remaining Harworth Shares.
General
This announcement should be read in conjunction with the full text of BidCo's firm offer announcement published on 6 August 2026, the Original Offer Document, the Investor Presentation, the Response Presentation and the Revised Offer Document, copies of which are (or will be) available (subject to certain restrictions relating to persons in Restricted Jurisdictions) on BidCo's website at www.peel.co.uk/investor-notice/details. The contents of BidCo's website are not incorporated into, and do not form part of, this announcement.
Rothschild & Co has given and not withdrawn its written consent to the issue of this announcement with the inclusion of the references to its name in the form and context in which they appear.
The sources of information and bases of calculation of certain information contained in this announcement are set out in the Appendix to this announcement
Dealing and Opening Position Disclosure Requirements
Appendix 1
BASES OF CALCULATION AND SOURCES OF INFORMATION
| 1. | Diluted EPRA NDV per share of 208.8 pence reflects reported figure from Harworth's 1H 2026 results including dilutive effect of 9.3m outstanding share options and shares held in trust under employee share schemes |
| 2. | The statement that "cost savings quantified by Harworth only reverse two years of cost growth to 2023 levels" is based on an implied administrative expense for 2028 reflecting reported administrative expenses of £36.3 million (FY25) less identified annualised run-rate savings of £7.4 million as stated by Harworth in its cost savings announcement dated 15 September 2026 |
| 3. | The statement that "the Market has declined by 10% since BidCo made the Offer" reflects the percentage decline in the FTSE EPRA Nareit UK Index (Ticker: 187604, as sourced from FactSet), reflecting the movement in the index from 6 August 2026 (the date of BidCo's firm Offer announcement) to 14 September 2026, with the index rebased to 100 as at 5 August 2026 |
| 4. | The value of the Revised Offer, of £599.77 million (rounded to two decimal places) is calculated on the basis of the issued and to be issued share capital of Harworth of 337,900,485 Harworth Shares |
| 5. | Unless otherwise stated, all volume-weighted average prices have been derived from Bloomberg and have been rounded to the nearest single decimal place |
| 6. | Certain figures included in this announcement have been subject to rounding adjustments |
| 7. | Save where otherwise stated, all information, statistics and statements referred to above are sourced from Harworth Group plc's own public disclosures, comprising: (i) Harworth Group plc's "Half Year Results" announcement for the six months ended 30 June 2026, released via RNS on 9 September 2026; (ii) Harworth Group plc's Response Document, published on 9 September 2026; (iii) Harworth Group plc's "Programme to achieve cost savings" announcement, released via RNS on 15 September 2026; and (iv) Harworth Group plc's prior periodic financial statements and results announcements, including its interim and full year results announcements and Annual Reports and Financial Statements for prior periods, in each case as released via RNS and published on Harworth's investor relations website |
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