14th Aug 2025 10:39
(Alliance News) - Unite Group PLC and Empiric Student Property PLC on Thursday said they have agreed to a takeover of Empiric by Unite, as Empiric reported higher revenue in the first half of 2025.
Both firms are UK student accommodation providers and have been in negotiations since Bristol-based Unite first approached London-based Empiric back in May. Due diligence began in June, after Unite revised its offer to value Empiric at roughly GBP710 million in total.
The final deal agreed on Thursday is a further revision to that offer. Empiric shareholders will receive 0.085 of a new Unite share, plus 32 pence in cash, valuing each share in Empiric at roughly 94.2p for GBP634 million. Including dividends, this rises to a 107.5p per share valuation, or GBP723 million in total.
Empiric stock traded down 0.8% at 92.90p on Thursday morning in London, giving it a market capitalisation of GBP615.0 million. Unite was 0.4% higher at 735.00p for a market cap of GBP3.59 billion.
Empiric shareholders will own 10% of the combined firm. The deal is subject to at least 75% approval from shareholders. Empiric's directors, whose collective stake is around 0.06%, have committed to vote in the deal's favour and have recommended other shareholders do the same.
The takeover is expected to become effective in the second quarter of 2026, but will also require clearance from the UK Competition & Markets Authority. Back in June, Empiric retracted a statement that it may need to dispose of some assets, as "the CMA will probably look at six out of the 23 cities" where it operates.
The statement came out of a meeting of "senior representatives" which Empiric later stressed "was not attended by an appropriate financial adviser or corporate broker to the company" and was not based on "substantive competition analysis".
Empiric Chair Mark Pain noted on Thursday that company's portfolio covers "the best locations in the UK's strongest university cities".
"Unite has identified Empiric's differentiated proposition through its Hello Student brand, as well as its focus on returner and post graduate students, as clear strategic pillars through which to grow its business," he added.
For his part, Unite Chair Richard Huntingford praised Empiric's "high-quality and complementary portfolio".
Separately on Thursday, Empiric released first-half results. It raised its dividend amid improved revenue, which rose 3.3% on-year to GBP43.8 million for the six months that ended June 30. Net tangible assets per share edged up to 120.2 pence at June 30 from 119.6p at December 31.
However, Empiric's pretax profit fell 22% to GBP19.3 million from GBP24.8 million, as its gross margin shrunk by 3.7 percentage points to 68.5%. Life-for-like rental growth slowed to 7.0% from 10.5%.
Empiric nonetheless upped its quarterly dividend per share to 0.925p from 0.8725p. This increased the first-half dividend by 5.7% to 1.85p per share, as the company backed its full-year dividend target for a minimum of 3.7p.
"Although reservations have been slower for the coming academic year than has been the case in recent cycles, student application data remains strong and the Group's sales pattern remains comfortably ahead of the wider market," Empiric said.
The accommodation provider noted that applications from both domestic and international students continued to grow, with four postgraduate-exclusive openings expected to bolster income in the coming academic year.
Restructuring efforts concluded in March, ahead of a planned increase to National Insurance payments. Empiric reported GBP800,000 in restructuring costs related to severance payments, plus GBP200,000 in legal costs related to Unite's offer. Empiric maintains that these actions will ease "cost challenges" going forward, with the takeover deal expected to "drive further growth".
"With the portfolio remaining in public hands, for those shareholders who wish to remain invested in the enlarged group, the transaction offers compelling immediate and longer-term financial benefits with enhanced returns," Empiric added.
By Holly Munks, Alliance News reporter
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