LONDON: Peel Pepper (UK) Limited raised its cash offer for British property investor Harworth Group PLC to 177.5 pence ($2.36) per share Tuesday, valuing the company at about 599.77 million pounds ($799 million).

The increased offer, announced by the indirectly wholly-owned subsidiary of Peel Holdings Group Limited, represents a 2.9% increase over the original 172.5 pence per share cash offer announced Aug. 6.

Peel Pepper said the revised offer provides shareholders “an attractive and certain cash solution at a fair valuation and significant 40% premium,” against what it described as Harworth’s increasingly uncertain outlook and unsuitable public company structure.

The bidder published a response presentation outlining its observations on Harworth’s defense document, issued Sept. 9.

Peel Pepper said Harworth faces significant operational and structural challenges, including declining net asset value, higher leverage, a capital-constrained balance sheet, worsening cash flow and lower sales volumes.

Harworth’s net asset value declined 4.3% over six months, with diluted EPRA NDV per share now at 208.8 pence, Peel Pepper said. The bidder noted gilt yields have worsened by about 30 basis points since June 30 and UK industrial market yields are widening.

The company said Harworth’s newly announced strategy raises concerns, including that fully exiting residential land into a challenging market may require significant discounts and lead to further NAV reductions. It also called the data center strategy “deficient in detail, inconsistent,” with potential cash flows not realized until the mid-to-late 2030s.

The revised offer represents a premium of approximately 23.6% to Harworth’s closing price of 143.6 pence on Aug. 5, the last business day before the offer period began. It also represents a 40.9% premium to the one-month volume-weighted average price of 126.0 pence and a 40.0% premium to the three-month volume-weighted average price of 126.8 pence.

Peel Pepper said the market has declined 10% since it made its original offer.

Further details will be set out in a revised offer document to be distributed to Harworth shareholders, along with a second form of acceptance for shares held in certificated form.