3rd Jul 2019 16:20
(Alliance News) - Unite Group PLC said Wednesday it has raised GBP259.6 million through a placing, which will partly fund the GBP1.4 billion acquisition of Liberty Living Holdings Inc.
The student accommodation provider issued 26.4 million shares at a price of 985 pence per share, reflecting a 3.8% discount to Unite's closing price on Tuesday at 997.50 pence. The new shares represent 10% of Unite's issued share capital before the placing.
Shares in Unite were up 4.5% at 1,042.00 pence on Wednesday afternoon.
JP Morgan Cazenove and Numis Securities Ltd acted as joint bookrunners for the placing.
Earlier on Wednesday, Unite said it would acquire Liberty Living Holdings, which owns a portfolio comprising of 24,021 student beds, valued at GBP2.2 billion as of May 31.
It is "high quality", Unite said, and will add exposure to new Russell Group universities in Southampton and Cardiff. Some 82% of the portfolio is aligned to "high and mid-ranked" universities, Unite added.
Unite is to pay GBP1.4 billion on a net asset value-for-net asset value basis, in a combination of cash and shares.
The cash element will be worth GBP800 million, with the remaining GBP600 million in 72.6 million new Unite shares, which will represent 20% of the enlarged company.
"We are delighted to have successfully completed this fundraise and for the strong support received following consultation with a significant number of shareholders. The funds raised will be used to part finance the transformative acquisition of Liberty Living and maintain our balance sheet strength. The acquisition accelerates and extends our earnings growth and provides opportunities to further enhance total shareholder returns," said Chief Executive Officer Richard Smith.
Following the placing, Unite now has 290.3 million shares issued overall.
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