The Unite Group is acquiring smaller listed UK student accommodation company Empiric Student Property in a £723m (€840m) deal.
Unite is offering Empiric shareholders 0.085 new Unite shares and 32p in cash in a deal that values Empiric at £723m when including dividend payments, or £634m without the yet-to-be-made payments.
Once the deal is finalised, Empiric shareholders will hold around 10% of the issued share capital of the combined group, which will have a £10.5bn portfolio, with existing Unite shareholders holding the remaining 90% stake.
The offer represents a 10% premium over Empiric’s share price of 97.3p on the last trading day before the offer period began.
Unite, a FTSE 100-listed company with a £4.2bn market capitalisation, owns 152 properties. FTSE 250-listed UK real estate investment trust Empiric has a £1.2bn portfolio comprising 74 operational assets and 7,717 student beds.
Richard Huntingford, chair of Unite Group, said: “Acquiring Empiric’s high-quality and complementary portfolio accelerates our growth into the attractive returner student segment, enabling us to better serve students throughout their academic journey.
“Unite is uniquely positioned to unlock significant synergies and accelerate earnings growth for both sets of shareholders. Alongside university partnerships and our significant development pipeline, the acquisition provides a new growth driver to deliver enhanced scale and long-term value for shareholders.”
Mark Pain, chair of Empiric Student Property, said: ”The board of Empiric believes the firm and recommended offer from Unite is highly compelling for Empiric’s shareholders as it will deliver material accretion to earnings and dividends per share, deliver synergy benefits and provide superior access to capital to drive growth, whilst enabling shareholders to remain invested in a portfolio of highly attractive UK student accommodation assets.”
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