Recommended Increased Best and Final Offer

Peel Pepper launches a £631.7 million cash takeover for Harworth at a 47% premium.

What the company is saying

Harworth Group plc has received a recommended increased best and final cash offer from Peel Pepper (UK) Limited (BidCo), wholly owned by Peel Holdings Group Limited, at 187 pence per share. The company frames the offer as providing certainty and immediate value to shareholders, citing a challenging macroeconomic backdrop, persistent share illiquidity, and a concentrated shareholder base. The Harworth Board, with advice from Barclays and Peel Hunt, unanimously recommends acceptance, arguing the offer removes execution risk from Harworth’s standalone strategy. The announcement highlights that the offer is a 47.4% premium to the three-month average share price and only a 10.4% discount to EPRA NDV, much narrower than the historical average discount of 28.2%. The board emphasizes that the offer accelerates returns and provides full liquidity for shareholders. The tone is confident, with the company stressing the fairness and finality of the terms, while also noting that the offer will not be increased except in narrowly defined circumstances.

What the data suggests

BidCo has agreed to purchase 72,080,449 Harworth shares at 187 pence each, with settlement expected on 29 September 2026. Upon settlement, BidCo will control or have acceptances for 170,377,069 shares, representing 52.1% of Harworth’s issued share capital, thereby satisfying the acceptance condition for the offer to become unconditional. The offer values Harworth at approximately £631.7 million. The 187 pence per share price represents a 47.4% premium to the three-month volume-weighted average price of 126.8 pence and a 30.2% premium to the 5 August 2026 closing price of 143.6 pence. The offer is an 8.4% increase over the previous offer made on 6 August 2026. The offer is at a 10.4% discount to the 30 June 2026 EPRA NDV of 208.8 pence per share, significantly narrower than the average 28.2% discount over the past three years. Harworth’s share price has closed at or below 187 pence on 98.2% of trading days in the last five years, suggesting the offer is at the upper end of the historical trading range. BidCo and its concert parties previously acquired 137,669 shares, reaching 30% of voting capital and triggering a mandatory offer under Rule 9.1(a). BidCo’s financing is secured through its own cash and an interim facilities agreement with HSBC UK Bank PLC and National Westminster Bank PLC. The offer is subject only to acceptances exceeding 50% of voting rights, with further details to be provided in a revised offer document.

Analysis

The announcement is a formal recommended cash offer for Harworth Group plc, with clear, specific, and quantified terms: price per share, number of shares, settlement date, and percentage of share capital to be acquired. The majority of key claims are realised or imminent (e.g., agreed purchases, settlement anticipated within days, financing secured), with only a minority of statements being forward-looking (such as ongoing market purchases and the expectation of the offer becoming unconditional). The tone is positive but proportionate, focusing on factual premiums, discounts, and board recommendation. There is no narrative inflation or exaggerated language; all claims are supported by disclosed figures. The capital outlay is large, but the benefits (cash offer to shareholders) are immediate upon settlement. No overstated or promotional phrases are present.

Risk flags

• ●There is a risk that the offer could lapse if not enough shareholders tender their shares, though BidCo is set to control over 52% upon settlement, reducing but not eliminating this risk.
• ●The offer is final and will not be increased except in the event of a competing bid or with Panel consent, so shareholders face a binary choice with limited upside if they reject the offer and no rival emerges.
• ●Harworth’s operational challenges—declining NAV, higher leverage, constrained balance sheet, and low liquidity—are cited as reasons for the offer, but these same factors could limit future value if the deal fails.
• ●BidCo’s financing involves both cash and debt via an interim facilities agreement, introducing some execution risk if market or lender conditions change before completion.
• ●The offer is at a 10.4% discount to EPRA NDV, and while narrower than historical averages, shareholders are crystallizing a value below book, which may be contentious for some long-term holders.

Bottom line

Peel Pepper’s £631.7 million cash offer for Harworth Group delivers a 47.4% premium to recent trading and is positioned as a full and final bid, with settlement of a controlling stake imminent. The Harworth Board’s unanimous recommendation and the offer’s narrow discount to EPRA NDV suggest this is likely the best near-term liquidity event for shareholders, especially given the company’s operational headwinds and persistent share illiquidity. The transaction is well-structured, with financing secured and a clear timetable for completion, but shareholders must accept a price below book value and forgo potential long-term recovery. The main risk is the absence of a rival bid or further price improvement, as the offer terms are final unless a competing offer emerges. Investors should expect the deal to close quickly, with the revised offer document and formal unconditionality announcement as the next milestones. The most important takeaway is that this is a rare opportunity for full liquidity at a significant premium in a structurally challenged company.

Announcement summary

(LSE:HWG) Harworth Group plc has received a recommended increased best and final cash offer from Peel Pepper (UK) Limited (BidCo), a company indirectly wholly-owned by Peel Holdings Group Limited, to acquire the entire issued and to be issued ordinary share capital of Harworth not already owned by BidCo or its subsidiaries at a price of 187 pence per Harworth Share. BidCo has agreed to purchase 72,080,449 Harworth Shares at 187 pence per share, with settlement anticipated on 29 September 2026. Upon settlement, BidCo will own or have received valid acceptances in respect of 170,377,069 Harworth Shares, representing approximately 52.1% of Harworth's issued share capital, which will count toward satisfaction of the Acceptance Condition. BidCo is continuing to seek to purchase additional Harworth Shares by means of market or other purchases at or below the Best and Final Offer price. The Best and Final Offer at 187.0 pence per share represents a discount of 10.4% to Harworth’s Diluted EPRA NDV per share of 208.8 pence as at 30 June 2026, compared to an average discount of 28.2% over the last 3 years. Harworth’s share price has closed at or below 187.0 pence per share on 98.2% of trading days over the last five years. The offer represents a premium of 47.4% to the three-month volume-weighted average share price of 126.8 pence per share for the period ended 5 August 2026, and a premium of 30.2% to the closing price of 143.6 pence per share on 5 August 2026. The Best and Final Offer values Harworth’s entire issued and to be issued share capital at approximately £631.7 million. The offer is an 8.4% increase on the offer announced on 6 August 2026. BidCo and persons acting in concert acquired interests in 137,669 Harworth Shares, and as a result, held 30.00% of the voting share capital, making the offer mandatory under Rule 9.1(a) of the Takeover Code. The Harworth Board, advised by Barclays and Peel Hunt, unanimously recommends that shareholders accept the offer, considering it fair and reasonable. BidCo’s financing for the offer is secured through its own cash resources and an interim facilities agreement with HSBC UK Bank PLC and National Westminster Bank PLC. Rothschild & Co Global Markets Solutions Limited is acting on behalf of BidCo to purchase shares at or below the offer price. The offer is subject to valid acceptances being received in respect of shares carrying more than 50% of the voting rights. Further details will be set out in a revised offer document to be distributed to shareholders.

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