Publication of Response Document
Summary by AI BETAClose X
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTIONWHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 ("UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
FOR IMMEDIATE RELEASE
9 September 2026
Harworth Group plc
("Harworth")
Publication of Response Document
The Board of Harworth (the "Board") today announces the publication by Harworth of its response document (the "Response Document") to the offer document published by Peel Pepper (UK) Limited ("Peel Bidco") on 26 August 2026, relating to the unrecommended cash offer by Peel Bidco for Harworth at a price of 172.5p per Harworth Share (the "Unrecommended Offer"). Capitalised terms used but not otherwise defined in this announcement have the meanings given to them in the Response Document.
As previously announced, the Board is unanimous and unequivocal in its rejection of the Unrecommended Offer, which, in its view, fundamentally undervalues Harworth and its near- and longer-term prospects.
The Response Document sets out in full the Board's views on the Unrecommended Offer and the reasons for the Board's unanimous and unequivocal rejection of the Unrecommended Offer. A summary of the key reasons for the Board's recommendation is set out below. This should be read together with the Response Document in its entirety.
(A) THE UNRECOMMENDED OFFER IS AT A 19.7% DISCOUNT TO HARWORTH'S EPRA NDV AS AT 30 JUNE 2026
· Harworth's EPRA NDV as at 30 June 2026 of £697.7 million, or 214.8 pence per Harworth Share, is based on independent, professional valuations of Harworth's current standing assets and land portfolio net of applicable taxes.
· These independent valuations have been supported consistently by a track record of disposals and lettings by Harworth across market cycles.
(B) HARWORTH'S EPRA NDV OF 214.8 PENCE PER HARWORTH SHARE DOES NOT FULLY CAPTURE THE ADDITIONAL EMBEDDED VALUE WITHIN THE GROUP
Hyperscale Data Centres
· Harworth has a substantial hyperscale data centre pipeline in the UK, with 0.8GW of accepted power offers in place and has identified opportunities across its existing land bank to increase its total powered land pipeline to 1.9GW.
· Harworth's strategy to dispose of sites at the powered land stage allows it to deliver and monetise returns to Harworth Shareholders in a capital-efficient way and at an early stage, well before power-on dates.
· JLL has undertaken a forward-looking assessment to identify the potential Net Realisable Value ("NRV", as defined in the NRV Report) of Harworth's existing land portfolio deemed suitable for data centre development at £293 million. This represents the potential increase in capital receipts that may be realised through a sale of serviced land for data centre use assuming successful delivery of the relevant power, planning and servicing milestones, assuming full ownership and calculated using residual methodology after taking account of the costs required to reach that stage. NRV is not a valuation and is not discounted to present day. It assumes 100% success rate. This summary should be read together with, and is qualified in its entirety by reference to, JLL's NRV Report including the assumptions, limitations and disclaimers contained therein.
· This potential value is not reflected in the Group's independent property valuations prepared in accordance with the Red Book and is therefore not included within Harworth's EPRA NDV as at 30 June 2026.
· Taking account of the anticipated timing of delivery and discounting the estimated future receipts to a present value, Harworth's data centre pipeline represents potential incremental value of approximately £121 million above Harworth's EPRA NDV as at 30 June 2026, equivalent to c.37.3 pence per Harworth Share.
Industrials & Logistics Development Opportunities
· Harworth has 3.8 million square feet of industrial & logistics land that is construction-ready with a further medium-term pipeline of 9.6 million square feet.
· JLL has undertaken a forward-looking assessment to identify the potential NRV of Harworth's near to medium-term industrial & logistics development pipeline at £174 million. This represents the potential increase in capital value that may be realised should a revaluation be undertaken assuming Harworth's successful delivery of the development pipeline (gross development value), assuming full ownership and calculated using residual methodology to remove the developers potential profit embedded within the target schemes at practical completion after taking account of the costs required to deliver the target schemes and the current carrying valuation. NRV is not a valuation. This summary should be read together with, and is qualified in its entirety by reference to, JLL's NRV Report including the assumptions, limitations and disclaimers contained therein.
· Harworth has adjusted the potential uplift in value for the impact of tax and has arrived at a post-tax value of £131 million, equivalent to 40.2 pence per Harworth Share.
Further incremental value items
· Harworth generates recurring income from PPAs which represents further incremental value not included in Harworth's EPRA NDV as at 30 June 2026.
· Harworth's 30 June 2026 balance sheet only includes the capitalised costs incurred to date under the PPAs. The potential capitalised value of the historical annualised recurring income derived from PPAs is estimated to be £16.4 million.
· The capitalised value of the potential recurring income from PPAs represents further potential incremental value of 5.1 pence per Harworth Share above Harworth's EPRA NDV as at 30 June 2026.
Total potential value of 297.4 pence per Harworth Share
· Taking together Harworth's EPRA NDV as at 30 June 2026 and the potential embedded value within Harworth's data centre and industrials & logistics portfolios, and its PPAs, the total estimated value of the Group is £965.6 million, equivalent to 297.4 pence per Harworth Share.
· The Unrecommended Offer is at a 42.0% discount to this total estimated value of the Group.
(C) HARWORTH IS ACCELERATING KEY INITIATIVES TO CREATE A SIMPLER, LOWER-COST AND HIGHER-RETURNING PLATFORM
Released as part of its Half Year Results today and trailed in its Half Year Trading Update, Harworth has announced an acceleration of key initiatives to create a simpler, lower-cost and higher-returning platform:
· accelerating the reallocation of capital to become a pure play powered land and industrial & logistics specialist, exiting the residential sector;
· refocusing on strategic land, enabling works and selective development to maximise returns;
· sizing the Investment Portfolio to support funding, while recycling to optimise returns; and
· aligning Harworth's operating model and cost base with a pure play powered land and industrial & logistics approach.
Having been agreed in principle by the Board earlier this year, the implementation of this platform is already underway and, once completed, the Board believes that it can deliver higher and more sustainable returns for Harworth Shareholders, targeting low double-digit Total Accounting Return in the longer-term.
The Board will consider returning some or all of the surplus capital from sales of material assets to Harworth Shareholders so that they benefit directly from the value creation initiatives as they are executed.
(D) THE UNRECOMMENDED OFFER IS HIGHLY OPPORTUNISTIC
· The Board believes that the Unrecommended Offer is timed to take advantage of the current material dislocation between Harworth's share price and the value of its underlying assets, driven by macroeconomic factors affecting the UK listed real estate sector as a whole.
· If Peel Bidco acquires all of the Harworth Shares, the Unrecommended Offer will allow Peel Bidco to extract for itself, the value upside from future returns derived from the capital invested by Harworth in its data centre and industrial & logistics pipeline over the last few years and the initiatives announced today, which are in the early stages of implementation, all at the expense of other Harworth Shareholders.
· Peel Bidco also stands to benefit from expected savings on Stamp Duty Land Tax equivalent to approximately £30.7 million or 9.5 pence per Harworth Share, by acquiring Harworth by way of a takeover offer (as opposed to direct property transactions), and from significant cost saving synergies, for which it is giving no demonstrable value in the Unrecommended Offer to the other Harworth Shareholders.
The summary above is not intended to be exhaustive. Harworth Shareholders are strongly advised to read the Response Document in full before deciding what action to take in relation to their Harworth Shares.
The Harworth Directors, who have been so advised by Barclays and Peel Hunt as to the financial terms of the Unrecommended Offer, do not consider the terms of the Unrecommended Offer to be fair and reasonable. Accordingly, the Harworth Directors believe that the Unrecommended Offer is not in the best interests of Harworth Shareholders as a whole. In providing their advice to the Harworth Directors, Barclays and Peel Hunt have taken into account the commercial assessments of the Harworth Directors. Barclays and Peel Hunt are providing independent financial advice to the Harworth Directors for the purposes of Rule 3 of the Code.
THE board RECOMMENDs UNANIMOUSLY THAT HARWORTH SHAREHOLDERS WHO HAVE NOT ACCEPTED THE UNRECOMMENDED OFFER DO NOT DO SO and that HARWORTH SHAREHOLDERS WHO HAVE ALREADY ACCEPTED THE UNRECOMMENDED OFFER WITHDRAW THEIR ACCEPTANCES AS SOON AS POSSIBLE.
TO REJECT THE UNRECOMMENDED OFFER, HARWORTH SHAREHOLDERS WHO HAVE NOT ACCEPTED IT NEED TAKE NO ACTION - SIMPLY DO NOT RETURN THE FORM OF ACCEPTANCE OR SUBMIT AN ELECTRONIC ACCEPTANCE IN CREST.
HARWORTH SHAREHOLDERS WHO HAVE ALREADY ACCEPTED THE UNRECOMMENDED OFFER SHOULD FOLLOW THE WITHDRAWAL PROCEDURES SET OUT IN PARAGRAPH 3 OF PART III OF THE OFFER DOCUMENT, TO THE EXTENT THEY REMAIN ENTITLED TO WITHDRAW.
The Response Document is available (subject to certain restrictions relating to persons in Restricted Jurisdictions) on Harworth's website at https://harworthgroup.com/investors/unrecommended-offer-landing-page/. The content of Harworth's website is not incorporated into, and does not form part of, this announcement.
Hard copies of the Response Document (or, depending on Harworth Shareholders' communication preferences, a letter or email giving details of the website where the Response Document may be accessed) are being posted to Harworth Shareholders today. The Response Document will also be made available, for information only, to participants in the Harworth Share Plans and persons with information rights.
A copy of the Response Document will be submitted to the National Storage Mechanism and will be available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism.
Enquiries
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Harworth Group plc |
T: +44 (0) 114 349 3131 |
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Lynda Shillaw (Chief Executive) |
E: investors@harworthgroup.com |
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Kitty Patmore (Chief Financial Officer) |
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Tom Loughran (Head of Investor Relations & Communications) |
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Barclays (Joint Financial Adviser and Corporate Broker to Harworth) |
T: +44 (0) 20 7623 2323 |
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Bronson Albery |
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Callum West |
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Nicola Tennent |
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Mark Gunalan |
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Peel Hunt (Joint Financial Adviser and Corporate Broker to Harworth) |
T: +44 (0) 20 7418 8900 |
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Capel Irwin |
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Michael Nicholson |
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Chloe Ponsonby Henry Nicholls |
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FTI Consulting |
T: +44 (0) 20 3727 1000 |
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Dido Laurimore |
E: Harworth@fticonsulting.com |
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Ed Knight |
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Richard Gotla |
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Allen Overy Shearman Sterling LLP is acting as legal adviser to Harworth.
This announcement contains inside information for immediate release. The person responsible for arranging release of this document on behalf of Harworth Group plc is Christopher Birch, Company Secretary.
Disclaimers
Barclays Bank PLC, acting through its Investment Bank ("Barclays"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Harworth and no one else in connection with the Unrecommended Offer and will not be responsible to anyone other than Harworth for providing the protections afforded to clients of Barclays nor for providing advice in relation to the Unrecommended Offer or any other matter referred to in this announcement.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated by the Financial Conduct Authority in the UK, is acting exclusively for Harworth and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Harworth for providing the protections afforded to clients of Peel Hunt nor for providing advice in connection with the matters referred to herein. Neither Peel Hunt nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with this announcement, any statement contained herein or otherwise.
Publication on a website
In accordance with Rule 26.1 of the City Code on Takeovers and Mergers (the "Code"), a copy of this announcement will be available at www.harworthgroup.com/investors/unrecommended-offer-landing-page/ by no later than 12 noon (London time) on the business day following the date of this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who at the relevant time is interested (directly or indirectly) in 1% or more of any class of relevant securities of the offeree company or any securities exchange offeror must make a public Opening Position Disclosure (i) after the commencement of an offer period; and (ii) if later, after the announcement that first identifies any securities exchange offeror. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is (or as a result of any dealing becomes) interested (directly or indirectly) in 1% or more of any class of relevant securities of the offeree company or any securities exchange offeror must make a public Dealing Disclosure if the person deals in any relevant securities of the offeree company or any securities exchange offeror during an offer period. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
Where two or more persons act pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities, they will normally be deemed to be a single person for the purpose of this Rule 8.3 of the Code. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
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