Harworth Group (LSE:HWG), the strategic land and property regeneration company, published its response document rejecting the unrecommended cash offer from Peel Pepper (UK), first tabled on 26 August at 172.5p per share.
The board says the offer sits at a 19.7% discount to Harworth's EPRA net disposal value (NDV) of 214.8p per share as at 30 June, itself based on independent Red Book valuations of its standing assets and land bank.
Harworth argues that figure still understates the group's worth, pointing to a UK hyperscale data centre pipeline with 0.8GW of accepted power offers, expandable to 1.9GW, which it values at roughly 37.3p per share once discounted to present value.
Adding a further 40.2p per share from its industrial and logistics development pipeline and 5.1p from power purchase agreement income, Harworth puts total estimated value at 297.4p per share, implying the bid undervalues the group by 42%.
The board also flagged an acceleration of its shift toward a "pure play" powered land and industrial and logistics platform, exiting residential, and said it would consider returning surplus capital from asset sales to shareholders.
Harworth's advisers, Barclays and Peel Hunt, do not consider the offer's terms fair and reasonable.
The board unanimously recommends shareholders take no action to accept the offer, and that those who have already accepted withdraw as soon as possible.
News Intelligence what this means for the company
Harworth's board has formally rejected Peel Pepper's 172.5p bid, arguing it sits 19.7% below the company's independently valued net disposal value of 214.8p per share and ignores 297.4p of embedded value across data centre, industrial/logistics, and power assets. The defence hinges on whether the market credits the board's valuation of future pipeline projects—particularly a 0.8GW data centre platform valued at 37.3p per share—or views them as speculative relative to the 20.1% premium the bid already offers to Tuesday's closing price.
The rejection does not change Harworth's fundamental position as a strategic land and property play, but it crystallizes a binary outcome: either the board's pipeline valuations prove justified and the company trades materially higher independently, or Peel's offer becomes the floor. Half-year results on 15 September will be the next catalyst to test whether the market accepts the board's valuation bridge.
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