Peel Group’s £630 million offer for Harworth Group has been declared unconditional after securing acceptances covering more than 50 per cent of the listed land and property company's share capital.
Last month, Peel Pepper (UK) Ltd (BidCo), an indirect wholly-owned subsidiary of Peel Holdings Group, launched a cash offer to acquire the entire issued and to-be-issued ordinary share capital of Harworth Group not already held by Peel Holdings.
The initial cash offer of 172.5 pence per share valued Harworth’s total issued share capital at approximately £582.9 million.
The Board of Harworth Group unanimously rejected the proposal, stating that it "fundamentally undervalues" the business and its prospects, whilst describing the bid as "opportunistically timed".
BidCo subsequently submitted an increased offer of 177.5 pence per share, valuing Harworth at around £599.8 million. It then triggered a mandatory cash offer after raising its stake in the regeneration specialist to 30 per cent.
Following the improved terms, Harworth’s board again urged shareholders to take no action, maintaining that the bid "significantly undervalues Harworth and its near- and longer-term prospects".
Peel Group subsequently put forward a best and final offer of 187 pence per share, valuing Harworth at approximately £631.7 million.
Harworth’s directors unanimously recommended that shareholders accept the revised offer, stating that it "is in the best interests of all Harworth shareholders, as it accelerates shareholder returns that could be delivered from, and removes the execution risk associated with, the strategic plan that Harworth would pursue independently".
BidCo has now received valid acceptances in respect of approximately 52 per cent of Harworth's share capital. Consequently, the acceptance condition has been satisfied and the best and final offer has become unconditional.
Should BidCo secure acceptances in respect of 75 per cent or more of Harworth’s voting rights, it intends to apply for the cancellation of the company's listing on the London Stock Exchange and re-register Harworth as a private limited company.
If acceptances reach 90 per cent, BidCo intends to exercise its statutory rights to compulsorily acquire the remaining Harworth shares.
BidCo has also entered into a commitment letter with HSBC UK and NatWest to underwrite the debt financing for the transaction.
Rothschild & Co is acting as financial adviser to BidCo, alongside Travers Smith as legal adviser. Harworth Group is being advised by financial advisers Barclays and Peel Hunt, with Allen Overy Shearman Sterling serving as legal counsel.
