'Unequivocal': Harworth board rejects 'opportunistically-timed' £583m bid from Doncaster Sheffield Airport owner Peel
The board of Yorkshire-based land regeneration specialist Harworth have rejected an ‘opportunistically-timed’ £583m bid for the company from real estate giant and Doncaster Sheffield Airport land owner Peel.
Peel, a long-term investor in Harworth, announced on Thursday a cash offer of 172.5 p to acquire the entire share capital of Harworth Group plc via a subsidiary called Peel Pepper.
Peel said the offer represented a significant premium of 36 per cent to Harworth’s volume-weighted average share price for the latest three-month period and provides a “compelling opportunity for shareholders to realise full liquidity at fair value”. Peel argued Harworth’s assets would be “best owned, managed and developed under its full control".
The board of Harworth has now issued a “unanimous and unequivocal” response to the proposed deal on Friday afternoon.
Its statement said: “The board had no substantive engagement with Peel Pepper or Peel about any offer before their announcement yesterday.
"The board is unanimous and unequivocal in its rejection of the offer which, in its view, fundamentally undervalues Harworth and its near and longer-term prospects. The board also believes that the offer has been opportunistically timed to take advantage of a material dislocation between Harworth’s share price and the value of its underlying assets, driven predominantly by macroeconomic factors.
"The board remains confident in Harworth’s ability to deliver attractive long-term returns for shareholders, as demonstrated by the group delivering an average 8.1 per cent Total Accounting Return over the past five years.
"The board will be writing to shareholders with its formal response to the offer once Peel Pepper’s offer document has been posted. In the meantime, shareholders are strongly advised to take no action.
"Further announcements will be made as and when appropriate.”
The statement said the company has already approved in principle a medium-term business plan which would include cost savings and help create “a simpler, lower-cost and higher-returning platform to deliver sustainable future growth for shareholders”.
Harworth was the property division of UK Coal, named after the Nottinghamshire village where the latter organisation was based. Now listed on the London Stock Exchange, it owns, develops and manages more than 14,000 acres of land on around 100 sites across the North and Midlands.