Peel Pepper (UK), the bid vehicle indirectly wholly-owned by Peel Holdings Group, raised its cash offer for Harworth Group (LSE:HWG) to 187p per share, a move it has declared best and final.
Harworth's board, which had previously defended the property regeneration and renewable energy company's standalone strategy, now unanimously recommends shareholders accept.
Peel Pepper has separately agreed to buy 72.08m Harworth shares at 187p, due to settle on 29 September, which would take its total holding to roughly 52.1% of Harworth's issued capital and satisfy the offer's acceptance condition.
The new price is an 8.4% increase on the 177.5p offer announced on 16 September and values Harworth's entire issued share capital at approximately £631.7m.
It represents a 30.2% premium to Harworth's closing price on 5 August, the day before the offer period began, and a 47.4% premium to the three-month volume-weighted average price over that period.
Harworth's board weighed the certainty of cash against "the risk-adjusted and time-weighted returns" achievable independently, noting the 187p offer sits at a 10.4% discount to the company's diluted EPRA net disposal value of 208.8p per share as at 30 June, narrower than the average 28.2% discount over the past three years.
Peel Pepper, in turn, argues Harworth faces "declining NAV, higher leverage, a capital constrained balance sheet, worsening cashflow and lower sales volumes" as a standalone business.
The bidder has secured financing through its own cash resources alongside a new interim facilities agreement with HSBC UK Bank and NatWest.
Acceptances are due by 1:00pm on 25 October, with a revised offer document to follow shortly.