Harworth Group’s board has reversed its previous opposition to Peel Holdings’ takeover bid, unanimously recommending shareholders accept an increased “best and final” cash offer of 187p per share that values the property developer at around £631.7m.

The offer from Peel Pepper (UK), Peel Holdings’ takeover vehicle, is 8.4% higher than its previous 177.5p proposal that Harworth's board urged its shareholders to reject. Harworth’s board on Friday said the revised terms were fair and reasonable after considering the certainty of an all-cash return against the risks and execution time associated with pursuing its standalone strategy.

The offer represents a 30.2% premium to Harworth’s 143.6p closing share price on 5 August, before the offer period began, and premiums of 48.4% and 47.4% to the one- and three-month volume-weighted average share prices respectively. Harworth shares rose to around 187p following the announcement, although they traded as high as 195p during the session.

Peel has also agreed to purchase 72.1 million Harworth shares at 187p each. Once the purchases settle, expected on 29 September, Peel will own or have valid acceptances for about 52.1% of Harworth’s issued share capital. It expects the offer to become unconditional following settlement.

The decision represents a U-turn from earlier this month, when Harworth argued the offer significantly undervalued the business. Manchester-based Peel was already Harworth’s largest shareholder before launching its takeover bid and is stake had subsequently crossed the 30% threshold, triggering a mandatory offer under Rule 9 of the UK takeover code.

Rotherham-based Harworth specialises in land regeneration and property development, with a focus on industrial, logistics and data-centre opportunities across northern England and the Midlands, all of which its director argued present significant future potential.

Harworth shares rose to around 187p, matching the bid price, and traded as high as 195p during the session.

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