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UK-based student housing developer Unite Group has proposed a GBP 719 million (USD 976 million) acquisition of Empiric Student Property, signalling further consolidation in the UK's REIT sector. The offer includes 30 pence in cash and 0.09 new Unite shares per Empiric share, valuing each at 107 pence. Empiric shareholders may also retain an interim dividend for Q1 2024. Empiric's shares rose 6.1% post-announcement, while Unite's fell 2.2%. The companies are now in a due diligence phase, with a formal decision due by July 3. Empiric specialises in premium, direct-let student housing, complementing Unite's portfolio near top UK universities. The acquisition would expand Unite's reach, especially among postgraduate and returning students. Unite also recently sold GBP 212 million in assets, likely to fund the deal. If finalised, the merger will strengthen Unite's market position and broaden its appeal across the UK student housing landscape.
Unite Group, one of the UK's leading student housing developers, has announced a proposal to acquire Empiric Student Property in a deal valued at approximately GBP 719 million (USD 976 million). This proposed acquisition marks another major move in the UK's real estate investment trust (REIT) sector, which has seen increased consolidation activity in recent months. Advertisement
Under the terms of the possible offer, Empiric shareholders would receive 30 pence in cash along with 0.09 new Unite shares for each share held, implying a total value of 107 pence per share. This offer represents a premium over Empiric's last trading price, though the shares closed Thursday at 103.2 pence-an eight-year high-following the announcement, reflecting a 6.1% gain. In contrast, Unite's shares declined by 2.2% to close at 837 pence.
This bid is a revised version of Unite's earlier approach in May and includes a provision allowing Empiric shareholders to retain an interim dividend of 0.925 pence per share for the quarter ending March 31. The companies have now entered a due diligence phase, as mandated by UK takeover regulations. Unite has until July 3 to either formalize the offer or withdraw.
Empiric focuses on premium, direct-let student accommodation located in key university towns and cities across the UK. The potential acquisition would bring together complementary portfolios and significantly expand Unite's reach, especially in serving postgraduate and returning students. Unite emphasized that combining with Empiric would create a larger, more resilient platform with a stronger presence near top-tier universities.
This proposed merger comes amid a wave of similar activity within the UK's REIT landscape. Just a day earlier, Warehouse REIT agreed to be acquired, while LondonMetric announced in May that it would buy Urban Logistics. Additionally, several American firms have shown increased interest in acquiring UK-based assets, contributing to heightened market activity.
In a related development, Unite revealed that it has recently sold off GBP 212 million worth of assets. This move suggests a strategic reallocation of resources to strengthen its financial position ahead of the possible acquisition.
Unite currently provides student housing at institutions such as the University of Liverpool and Birmingham City University. Meanwhile, Empiric operates properties serving students at universities including the University of Glasgow and the University of Edinburgh. The acquisition would allow the unified group to enhance service delivery and appeal to a broader student demographic, reinforcing its position as a leading player in the student accommodation sector.
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