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
| Harworth Group plc | T: +44 (0) 114 349 3131 |
| Lynda Shillaw (Chief Executive) | E: investors@harworthgroup.com |
| Kitty Patmore (Chief Financial Officer) | |
| Tom Loughran (Head of Investor Relations & Communications) | |
| Barclays (Joint Financial Adviser and Corporate Broker to Harworth) | T: +44 (0) 20 7623 2323 |
| Bronson Albery | |
| Callum West | |
| Nicola Tennent | |
| Mark Gunalan | |
| Peel Hunt (Joint Financial Adviser and Corporate Broker to Harworth) | T: +44 (0) 20 7418 8900 |
| Capel Irwin | |
| Michael Nicholson | |
| Chloe PonsonbyHenry Nicholls | |
| FTI Consulting | T: +44 (0) 20 3727 1000 |
| Dido Laurimore | E: Harworth@fticonsulting.com |