Unite Group Shares Move Off Lows As Empiric Acquisition Gets Recommendation

Unite Group shares (LON:UTG) have moved off their low today, following the announcement of a recommended acquisition of Empiric Student Property plc. The move aims to consolidate Unite's position as a leading provider of student accommodation, with markets cautious on UTG leading in.

Unite will acquire Empiric through a scheme of arrangement, offering Empiric shareholders 0.085 new Unite shares and 32 pence in cash for each Empiric share held. Based on Unite's closing share price of 732.0 pence as of the latest practicable date, the deal values each Empiric share at approximately 94.2 pence, and Empiric's total issued share capital at around £634 million. This valuation excludes anticipated Empiric dividends for the remainder of 2025.

However, using Unite's share price of 855.5 pence from June 4, 2025 (before the offer period), and including the expected Empiric dividends, the total transaction value rises to approximately 107.5 pence per Empiric share, valuing Empiric at £723 million. This represents a premium of 10% to Empiric's closing share price on June 4th, and premiums of 22% and 24% to its three- and six-month volume-weighted average prices, respectively.

The acquisition is intended to bolster Unite's scale and enhance its growth prospects, particularly among the UK's premier universities. Empiric's portfolio is considered complementary, potentially appealing to a broader range of students, including returning students and postgraduates. The combined entity anticipates cost synergies and operational efficiencies, which could lead to increased earnings and shareholder returns.

The acquisition of Empiric by Unite represents a significant consolidation in the UK student accommodation sector. While the deal offers strategic benefits and potential synergies, it also involves regulatory considerations and market reactions that both companies will need to navigate in the coming months.