LONDON: The Unite Group PLC, the UK’s largest provider of purpose-built student accommodation (PBSA), has reached an agreement to acquire rival Empiric Student Property PLC for approximately £723 million in a cash and share deal.
The acquisition, which is recommended by both companies’ boards, aims to create a combined portfolio valued at £10.5 billion and expand Unite’s presence in the UK’s strongest university markets.
Under the terms of the deal, Empiric shareholders will receive 0.085 new Unite shares and 32 pence in cash for each Empiric share they hold. Based on Unite’s closing share price on the last undisturbed trading date, this values each Empiric share at 107.5 pence, representing a premium of about 10% to Empiric’s closing price on that day. The offer is to be effected by means of a scheme of arrangement.
The acquisition is expected to significantly boost Unite’s scale, adding a high-quality, complementary portfolio of approximately 75,000 beds, with 92% located in Russell Group cities.
A key strategic driver for the deal is Empiric’s “Hello Student” brand, which focuses on non-first-year undergraduates and postgraduate students. Unite plans to leverage this platform to attract and retain students throughout their academic careers, a segment largely unaddressed by its current offerings.
Unite forecasts that the transaction will generate substantial cost synergies of £13.7 million through its operational platform. These synergies are expected to deliver earnings and dividend accretion for both sets of shareholders. Empiric shareholders will hold approximately 10% of the enlarged group’s share capital, allowing them to remain invested in the UK’s student accommodation sector while benefiting from the combined entity’s increased scale and capital access.
“The acquisition provides a new growth driver to deliver enhanced scale and long-term value for shareholders,” said Richard Huntingford, Chair of Unite.
Mark Pain, Chair of Empiric, highlighted the benefits for his company’s shareholders, stating that the offer is “highly compelling” and provides “superior access to capital to drive growth.”
The deal is conditional on shareholder and court approvals. The scheme document, providing full details of the acquisition, will be published in due course.