Infrastructure giant Peel Group has launched a £417m takeover bid for Yorkshire's Harworth Group, valuing the Rotherham-based developer at £582.9m. The offer of 172.5p per share represents a 20% premium on Harworth's closing share price from the previous evening.
Peel, which already owns nearly 30% of Harworth's shares, has made the offer through a subsidiary to acquire the remaining shares. The company says the acquisition could be funded entirely from its own cash resources.
Harworth's origins and portfolio
Harworth Group originated as the property arm of UK Coal, with many of its earliest sites being former mining locations across the North and Midlands. Today, it manages more than 15,000 acres across 100 sites, specialising in industrial and logistics developments for sale.
Peel argues that Harworth's cash flow profile is becoming less sustainable, citing increasing administrative costs and net interest expenses that are significantly higher than its recurring rental income. The company recommends that Harworth should pivot toward strategic land activities and selective development, a model that Peel believes would have a lower cost base and be more effectively executed within a private-company structure.
Shareholder concerns and potential job cuts
Peel also highlighted Harworth's highly concentrated shareholder register, with the three largest shareholders owning more than 75% of the company, which it believes limits growth potential. Although Peel has not undertaken a detailed review of Harworth's operations, it expects a successful takeover to result in significant headcount reduction. Harworth's latest accounts show it employs 143 people.
Recent Harworth successes
Just yesterday, Harworth announced plans to develop a second data centre and was in advanced talks on a sale of the site, which could be worth more than the £106m it received for a data centre site sold to Microsoft in Leeds earlier this year. The announcement came in a half-year trading update in which Harworth described itself as “one of the most significant regional players in the rollout of the UK's digital infrastructure, working with some of the largest operators in the industry.”
Peel's track record
Peel is known for major developments including Salford's Media City and the Trafford Centre. The company is registered in the Isle of Man but has its major bases in Manchester. So far, Harworth has not commented on the takeover offer.
