Unite Group (UTG) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition creates a £10.5bn, 75,000-bed portfolio across 30 cities, 92% in Russell Group markets, expanding reach to returners and postgraduates and new cities like Exeter and York.

• Empiric’s differentiated Hello Student brand and focus on returner/postgraduate students complement existing offerings and broaden the addressable market by c.1 million students.

• The deal accelerates entry into the returner segment, leveraging Empiric's strengths and the acquirer's platform for growth and retention.

• Acquisition is at a c.20% discount to replacement cost and a 4% discount to NTAs, providing an attractive entry point.

• Empiric’s development pipeline and university partnerships support long-term growth and value creation.

Financial terms and conditions

• Offer of 0.085 new shares and 32p in cash per Empiric share, valuing each at up to 107.5p (including dividends), with Empiric shareholders owning 10% of the enlarged group.

• Total equity value of £723m, with 69% in shares and 31% in cash; cash portion allows realization of 27% of Empiric’s EPRA NTA per share.

• Represents up to a 10% premium to the last undisturbed price and 21% premium to six-month VWAP.

• Funding through new shares, revolving credit facilities, and retention of Empiric’s debt at a 4.5% all-in cost.

• Empiric shareholders retain 2025 dividends and may be eligible for the acquirer’s H1 2026 dividend.

Synergies and expected cost savings

• Annual pre-tax recurring cost synergies of £13.7–14m expected, with 55% realized in the first year and full run-rate by year two.

• £2.2m from operational efficiencies and £11.5m from central overhead reductions.

• One-off integration costs of £13.9–14m, mostly incurred in the first year, with payback expected within 12 months.

• Synergies expected to drive earnings and dividend accretion within 12 months, with neutral impact in year one and accretive from year two.