BENGALURU: British student accommodation developer Unite Group has proposed to buy smaller rival Empiric Student Property for about 719 million pounds ($976 million), the companies said on Thursday, the latest in a string of deal-making in the UK.
Under the possible offer, shareholders of real estate investment trust Empiric would receive 30 pence in cash and 0.09 new Unite shares for each Empiric share held, for an implied value of 107 pence per share, the groups said.
The potential transaction could add to a growing list of deals in the UK and within the country’s REIT industry.
Warehouse REIT agreed on Wednesday to sell itself, LondonMetric said in May it would buy Urban Logistics, while a host of American companies have also bid for British firms in recent weeks.
Shares of Empiric, which focuses on premium, direct-let student accommodation in university towns and cities in the UK, surged to an eight-year high on Thursday, closing up 6.1% at 103.2 pence, but were still below the offer price.
Meanwhile, Unite closed down 2.2% at 837 pence.
The company said its proposal, a sweetened offer following its first approach in early May, also allows Empiric shareholders to retain a declared interim dividend of 0.925 pence per share for the quarter ended March 31.
Empiric said the companies have entered a due diligence period. Under UK takeover rules, Unite has until July 3 to make a firm offer for Empiric or walk away.
Unite said the potential acquisition would offer the combined group scale and enhance its appeal to students, particularly in those coming back and in those in postgraduate courses.
“The addition of Empiric’s high quality, complementary portfolio would create a combined group with enhanced scale and growth aligned to the UK’s strongest universities,” it said.
Unite also divested properties worth 212 million pounds earlier in the day.
It has accommodation around universities including University of Liverpool and Birmingham City University, while Empiric has facilities for the University of Glasgow and University of Edinburgh among others.
