Recommended acquisition of Empiric by Unite Group
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
14 August 2025
RECOMMENDED CASH AND SHARE ACQUISITION
of
EMPIRIC STUDENT PROPERTY PLC
by
THE UNITE GROUP PLC
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
The boards of directors of The Unite Group PLC ("Unite") and Empiric Student Property plc ("Empiric") are pleased to announce that they have reached agreement on the terms of a recommended cash and share offer pursuant to which Unite will acquire the entire issued and to be issued ordinary share capital of Empiric (the "Acquisition"). It is intended that the Acquisition will be effected by means of a scheme of arrangement under Part 26 of the Companies Act.
Key terms
Under the terms of the Acquisition, for each Empiric Share held, the Scheme Shareholders will be entitled to receive:
0.085 New Unite Shares and 32 pence in cash
Based on Unite's closing share price of 732.0 pence as at the Latest Practicable Date, and excluding the Empiric Q2, Q3 and Q4 dividends which are expected to be declared and paid to Empiric Shareholders prior to the Effective Date ("Empiric 2025 Dividends"), the Acquisition values each Empiric Share at approximately 94.2 pence and Empiric's entire issued and to be issued share capital at approximately £634 million. The terms of the Acquisition imply an EPRA NTA discount of 3.7 per cent. based on each of Unite's and Empiric's EPRA NTAs per share as at 30 June 2025 (excluding the Empiric 2025 Dividends).
Based on Unite's closing share price of 855.5 pence as at 4 June 2025 (being the last Business Day prior to the commencement of the Offer Period) (the "Last Undisturbed Trading Date"), and, in addition, the Empiric 2025 Dividends, the Acquisition values each Empiric Share at approximately 107.5 pence (the "Total Transaction Value") and Empiric's entire issued and to be issued share capital at approximately £723 million, representing:
· a premium of approximately 10 per cent. to Empiric's closing share price of 97.3 pence as at the Last Undisturbed Trading Date;
· a premium of approximately 22 per cent. to Empiric's three-month volume-weighted average price of 88.3 pence as at the Last Undisturbed Trading Date; and
· a premium of approximately 24 per cent. to Empiric's six-month volume-weighted average price of 86.6 pence as at the Last Undisturbed Trading Date.
Immediately following Completion, Empiric Shareholders will hold approximately 10 per cent. of the issued share capital of the Enlarged Group and existing Unite Shareholders will hold approximately 90 per cent. of the issued share capital of the Enlarged Group.
The Scheme Document will contain full details of the Acquisition and the Scheme.
Highlights of the Acquisition
The acquisition of Empiric's high quality, complementary portfolio provides Unite with greater scale and enhanced growth opportunities aligned to the UK's strongest universities. Empiric's differentiated customer proposition enables Unite to appeal to a broader customer base - at pace and at scale, and at a discount to estimated replacement cost - through increased exposure to the attractive segment for "returner" students (non-first year undergraduates and postgraduate students) which is largely unaddressed by "conventional" PBSA. With the benefit of substantial cost synergies, the Acquisition is expected to deliver earnings, and dividend accretion and enhanced returns for both companies' shareholders; while maintaining balance sheet strength. The Acquisition would result in:
· a £10.5 billion combined portfolio (Unite share: £7.4 billion) in the UK's strongest universities, with c.75,000 beds on a combined basis of which 92 per cent. are located in Russell Group cities;
· a platform for expansion in the attractive returner segment through a proven platform (representing c.11 per cent. of the Enlarged Group's portfolio value, with scope to increase to c.15-20 per cent. over time through conversions and future acquisitions) delivering a significant increase in Unite's addressable market, and enabling Unite to attract and retain students throughout their academic journey including the c.35,000 first-year students currently living with Unite;
· a dedicated high-quality product and service offering under the Hello Student brand, tailored to the needs of returner students and aligned with the UK's strongest universities;
· significant cost synergies of £13.7 million unlocked though Unite's best-in-class operating platform;
· earnings and dividend accretion for both sets of shareholders, from the first full year of ownership for Empiric Shareholders and in the second full year of ownership for Unite Shareholders (neutral in the first) as synergies are delivered;
· a low double-digit unlevered IRR ahead of Unite's cost of capital and supporting total accounting returns of c.10 per cent. p.a.; and
· the maintenance of a high-quality balance sheet, with pro forma net debt / EBITDA of 5.9x, net LTV of 29 per cent., a weighted average cost of debt of 4.1 per cent., a weighted average debt maturity of 3.6 years and £570 million of undrawn debt facilities, in each case as at 30 June 2025 adjusted for the impact of the cash consideration.
In arriving at its recommendation of the Acquisition, the Empiric Board also notes the specific benefits for Empiric Shareholders, including:
· based on Unite's closing share price as at the Last Undisturbed Trading Date, approximately 69 per cent. of the Acquisition consideration is payable in New Unite Shares, providing Empiric Shareholders with a tax-efficient means of remaining invested in the UK PBSA sector via the enlarged vehicle with exposure to the compelling strategic and financial benefits set out above;
· based on Unite's closing share price as at the Last Undisturbed Trading Date, approximately 31 per cent. of the Acquisition consideration is payable in cash, providing Empiric Shareholders with significant liquidity at a premium to Empiric's closing share price on the Last Undisturbed Trading Date, while underpinning the value of the Acquisition as a whole. In addition, on an EPRA NTA basis, the cash consideration allows Empiric Shareholders to realise the equivalent of approximately 27 per cent. of Empiric's EPRA NTA per Empiric Share of 120.2 pence as at 30 June 2025;
· the compelling financial effects of the combination in respect of the New Unite Shares, including:
§ participating in the synergy benefits arising from the Acquisition that Unite as an established, publicly listed PBSA operator of scale is uniquely qualified to deliver;
§ material earnings and dividend accretion, with an implied uplift of 36 per cent. and 30 per cent. in earnings and dividend per share, respectively based on 2024 earnings and dividends, prior to synergies; and
· the cost of capital benefits through holding shares in a FTSE 100 constituent with an investment grade credit rating, where the greater liquidity in the trading of Unite Shares compared with Empiric Shares would allow Empiric Shareholders to trade in and out of the Unite Shares should they wish to do so.
Recommendation
The Empiric Directors, who have been so advised by Peel Hunt and Jefferies as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their financial advice to the Empiric Directors, Peel Hunt and Jefferies have taken into account the commercial assessments of the Empiric Directors.
Accordingly, the Empiric Directors intend unanimously to recommend that Empiric Shareholders vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting, as the Empiric Directors have irrevocably undertaken to do in respect of their own holdings of Empiric Shares, representing approximately 0.06 per cent. of Empiric's issued share capital as at the Latest Practicable Date.
Pre-Completion dividends
In addition to the New Unite Shares and cash consideration received by Scheme Shareholders in connection with the Acquisition, the Empiric Board will be entitled to pay certain agreed ordinary course Empiric dividends to Empiric Shareholders prior to the Effective Date, full details of which are set out in this Announcement.
Following the Acquisition becoming Effective, the Unite Directors expect that dividends will continue to be paid in accordance with Unite's existing dividend timetable.
Transaction structure and timetable
It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement of Empiric under Part 26 of the Companies Act, further details of which are contained in the full text of this Announcement. Unite reserves the right to implement the Acquisition by way of a Takeover Offer, subject to the Panel's consent and the terms of the Co-operation Agreement.
The Acquisition will be made in accordance with the Code and on the terms and subject to the satisfaction or waiver (as applicable) of the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. These Conditions include, amongst others:
· the approval of the Scheme by a majority in number of Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting, representing at least 75 per cent. in value of the Scheme Shares voted by Scheme Shareholders of the Court Meeting. In addition, the Resolution must be passed by the requisite majority of Empiric Shareholders at the General Meeting;
· the CMA either:
o issuing a decision that it is not the CMA's intention to make a Phase 2 CMA Reference, with such a decision being issued unconditionally or else conditional on the CMA's acceptance of undertakings in lieu of a Phase 2 CMA Reference ("UILs") offered by Unite which are reasonably satisfactory to Unite, having regard to both the impact on overall portfolio value and the alignment of any assets subject to UILs to key universities, in particular Russell Group universities (or the applicable time period for the CMA to make a Phase 2 CMA Reference having expired without a Phase 2 CMA Reference having been made) ("CMA Phase 1 Clearance Condition"); or
o in the event that a Phase 2 Reference is made and the CMA Phase 1 Clearance condition cannot be invoked, confirming that the proposed acquisition of Empiric by Unite may proceed (i) without any undertakings or conditions or (ii) the CMA has decided to accept undertakings from, or imposed an order, on Empiric and/or Unite in order to allow the proposed acquisition of Empiric by Unite and any matter arising therefrom or relating thereto to proceed, provided such undertakings or orders are on terms reasonably satisfactory to Unite, having regard to both the impact on overall portfolio value and the alignment of any assets subject to UILs to key universities, in particular Russell Group universities ("CMA Phase 2 Clearance Condition");
(together, the "CMA Condition"); and
· the sanction of the Scheme by the Court.
The Scheme Document will contain full details of the Acquisition and the Scheme, together with notices of the Court Meeting and the General Meeting and the expected timetable of the Scheme and will specify the action to be taken by Empiric Shareholders. It is expected that the Scheme Document will be despatched to Empiric Shareholders (together with the Forms of Proxy) within 28 days of this Announcement (unless otherwise agreed by the Panel, Unite and Empiric).
The Scheme is expected to become Effective by the second quarter of 2026, subject to the satisfaction or waiver of (as applicable) the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions to be set out in the Scheme Document.
An expected timetable of the key events of the Acquisition will be set out in the Scheme Document.
Commenting on the Acquisition, Mark Pain, Chair of Empiric said:
"Over the last few years, the Board and management of Empiric has implemented a successful transformation strategy, aligning the company's portfolio to 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.
The Board of Empiric believes the firm and recommended offer from Unite is highly compelling for Empiric's shareholders as it will deliver material accretion to earnings and dividends per share, deliver synergy benefits and provide superior access to capital to drive growth, whilst enabling shareholders to remain invested in a portfolio of highly attractive UK student accommodation assets."
Commenting on the Acquisition, Richard Huntingford, Chair of Unite said:
"Acquiring Empiric's high-quality and complementary portfolio accelerates our growth into the attractive returner student segment, enabling us to better serve students throughout their academic journey.
Unite is uniquely positioned to unlock significant synergies and accelerate earnings growth for both sets of shareholders. Alongside university partnerships and our significant development pipeline, the acquisition provides a new growth driver to deliver enhanced scale and long-term value for shareholders."
Analyst and investor presentation
Unite will host a presentation for analysts and investors today at 8:30 am (London time) to discuss the Acquisition.
To watch via webcast, please register and log in at the following: brrmedia.news/UTG_Aug25
Subject to certain restrictions, the slides used in the presentation will be available to all interested parties at www.unitegroup.com/investors/possible-offer-for-empiric-student-property-plc.
This summary should be read in conjunction with, and is subject to, the full text of this Announcement including the Appendices.
The Acquisition is subject to the satisfaction or waiver (as applicable) of the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains sources and bases of certain information contained within this Announcement. Appendix 3 contains details of the irrevocable undertakings given to Unite in relation to the Acquisition.
Appendix 4 to this Announcement contains the Quantified Financial Benefits Statement, together with the reports from Grant Thornton, as reporting accountants to Unite for the purposes of the Quantified Financial Benefits Statement, and Lazard, as financial adviser to Unite for the purposes of the Quantified Financial Benefits Statement, as required under Rule 28.1(a) of the Code. Each of Grant Thornton and Lazard has given and not withdrawn its consent to the publication of its report in this Announcement in the form and context in which it is included. For the purposes of Rule 28 of the Takeover Code, the Quantified Financial Benefits Statement contained in this Announcement is the responsibility of Unite and the Unite Directors.
Appendix 5 to this Announcement contains property valuations supported by valuation reports for Unite and Empiric as at 30 June 2025 pursuant to the requirements of Rule 29 of the Code. These property valuation reports will, subject to the requirements of the Code, be reproduced in the Scheme Document. Each of Knight Frank, JLL, CBRE and Cushman & Wakefield has given and not withdrawn its consent to the publication of their respective valuation reports in this Announcement in the form and context in which it is included.
Appendix 6 contains details of the Unite 2025 Profit Forecast and Empiric 2025 Profit Forecast.
Appendix 7 contains the definitions of certain terms used in this Announcement.
Enquiries:
Unite +44 (0) 117 302 7005
Joe Lister (Chief Executive Officer)
Michael Burt (Chief Financial Officer)
Saxon Ridley (Head of IR and Investment Finance)
Lazard (Lead Financial Adviser to Unite) +44 (0) 20 7187 2000
Patrick Long
Jolyon Coates
Harriet Wedmore
Deutsche Numis
(Joint Financial Adviser and Corporate Broker to Unite) +44 (0) 20 7260 1000
Heraclis Economides
Oliver Hardy
Oliver Ives
J.P. Morgan Cazenove
(Joint Financial Adviser and Corporate Broker to Unite) +44 (0) 20 3493 8000
Matt Smith
Paul Pulze
Saul Leisegang
Sodali & Co (Communications Adviser to Unite) +44 (0) 20 7250 1446
Justin Griffiths
Victoria Heslop
Louisa Henry
Empiric (via FTI Consulting)
Mark Pain (Non-Executive Chairman)
Duncan Garrood (Chief Executive Officer)
Donald Grant (Chief Financial & Sustainability Officer)
Peel Hunt (Joint Financial Adviser and Corporate Broker to Empiric) +44 (0) 20 7418 8900
Capel Irwin
Michael Nicholson
Henry Nicholls
Jefferies (Joint Financial Adviser and Corporate Broker to Empiric) +44 (0) 20 7029 8000
Tom Yeadon
Philip Noblet
Harry Le May
FTI Consulting (Communications Adviser to Empiric) +44 (0) 20 3727 1000
Dido Laurimore
Eve Kirmatzis
Herbert Smith Freehills Kramer LLP is acting as legal adviser to Unite in connection with the Acquisition.
Gowling WLG (UK) LLP is acting as legal adviser to Empiric in connection with the Acquisition.
Further information
This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase or otherwise acquire, subscribe for, sell, or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Empiric in any jurisdiction in contravention of applicable laws. The Acquisition will be implemented solely pursuant to the terms of the Scheme Document (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the Offer Document), which, together with the Forms of Proxy, will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any decision by Empiric Shareholders in respect of, or other response to, the Acquisition (including any vote in respect of the Resolution to approve the Acquisition, the Scheme or related matters), should be made only on the basis of the information contained in the Scheme Document (or, if the Acquisition is implemented by way of a Takeover Offer, the Offer Document).
This Announcement does not constitute a prospectus or prospectus equivalent document.
The person responsible for arranging for the release of this Announcement on behalf of Unite is Christopher Szpojnarowicz, Group Legal Director & Company Secretary, and on behalf of Empiric is Lisa Hibberd, Company Secretary.
The Acquisition will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the FCA.
Information relating to Empiric Shareholders
Please be aware that addresses, electronic addresses and certain other information provided by Empiric Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Empiric may be provided to Unite during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
Important Notices relating to the Financial Advisers
Lazard & Co., Limited ("Lazard") which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Unite and no one else in connection with the Acquisition and will not be responsible to anyone other than Unite for providing the protections afforded to clients of Lazard nor for providing advice in connection with the Acquisition or any matter referred to herein. Neither Lazard nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this Announcement, any statement contained herein or otherwise.
Deutsche Bank AG is a stock corporation (Aktiengesellschaft) incorporated under the laws of the Federal Republic of Germany with its principal office in Frankfurt am Main. It is registered with the local district court (Amtsgericht) in Frankfurt am Main under No HRB 30000 and licensed to carry on banking business and to provide financial services. The London branch of Deutsche Bank AG is registered as a branch office in the register of companies for England and Wales at Companies House (branch registration number BR000005) with its registered branch office address and principal place of business at 21, Moorfields, London EC2Y 9DB. Deutsche Bank AG is subject to supervision by the European Central Bank (ECB), Sonnemannstrasse 22, 60314 Frankfurt am Main, Germany, and the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht or BaFin), Graurheindorfer Strasse 108, 53117 Bonn and Marie-Curie-Strasse 24-28, 60439 Frankfurt am Main, Germany. With respect to activities undertaken in the United Kingdom, Deutsche Bank AG is authorised by the Prudential Regulation Authority. It is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of Deutsche Bank AG's authorisation and regulation by the Prudential Regulation Authority are available from Deutsche Bank AG on request. Deutsche Bank AG, London Branch (trading for these purposes as Deutsche Numis) ("Deutsche Numis") is acting exclusively for Unite and no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters in this Announcement and will not be responsible to anyone other than Unite for providing the protections afforded to clients of Deutsche Numis, nor for providing advice in relation to any matter referred to herein. Neither Deutsche Numis nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this Announcement, any statement contained herein or otherwise.
J.P. Morgan Securities PLC, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is authorised in the United Kingdom by the Prudential Regulation Authority (the "PRA") and regulated by the PRA and the Financial Conduct Authority, is acting exclusively for Unite and no one else in connection with the Acquisition and will not regard any other person as its client in relation to the Acquisition and will not be responsible to anyone other than Unite for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this Announcement.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser and corporate broker to Empiric and no one else in connection with the Acquisition and will not be responsible to anyone other than Empiric for providing the protections afforded to clients of Peel Hunt, nor for providing advice in connection with the Acquisition or any matter referred to herein. Neither Peel Hunt nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with this Announcement, any statement contained herein or otherwise.
Jefferies International Limited ("Jefferies"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser and corporate broker to Empiric and no one else in connection with the Acquisition and will not regard any other person as its client in relation to the matters in this Announcement and will not be responsible to any person other than Empiric for providing the protections afforded to clients of Jefferies nor for providing advice in connection with the Acquisition or in relation to any matter referred to in this Announcement. Neither Jefferies nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Jefferies in connection with this Announcement, any statement contained herein or otherwise.
Overseas shareholders
The release, publication or distribution of this Announcement in or into jurisdictions other than the United Kingdom may be restricted by law. Any persons who are not resident in the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Empiric Shares with respect to the Scheme at the Court Meeting, or to execute and deliver Forms of Proxy appointing another to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.
This Announcement has been prepared for the purpose of complying with English law, the Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.
Unless otherwise determined by Unite or required by the Code, and permitted by applicable law and regulation, the New Unite Shares to be issued pursuant to the Acquisition to Empiric Shareholders will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or form (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, any Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws of, or require registration thereof in, that jurisdiction. Persons (including without limitation nominees, trustees and custodians) receiving this Announcement or any formal documentation relating to the Acquisition must not mail or otherwise forward, distribute or send such documents in, into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Acquisition will not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.
The availability of New Unite Shares pursuant to the Acquisition to Empiric Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements. Empiric Shareholders who are in any doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.
Further details in relation to Empiric Shareholders in overseas jurisdictions will be contained in the Scheme Document.
Notes to US investors in Empiric
Empiric Shareholders in the United States should note that the Acquisition relates to the shares of an English company and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, English law. Neither the proxy solicitation nor the tender offer rules under the US Securities Exchange Act of 1934, as amended, will apply to the Scheme. Moreover the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. However, if Unite were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer would be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Any such Takeover Offer would be made in the United States by Unite and no one else. In addition to any such Takeover Offer, Unite, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Empiric outside any such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act. Any information about any such purchases would be disclosed as required in the UK and, if relevant, would be reported to a Regulatory Information Service and would be available on the London Stock Exchange website at www.londonstockexchange.com.
Financial information included in this Announcement and the Scheme Document has been or will be prepared in accordance with International Financial Reporting Standards ("IFRS") and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. If Unite exercises its right to implement the Acquisition by way of a Takeover Offer in accordance with the terms of the Co-operation Agreement and determines to extend the offer into the United States, such offer will be made in compliance with applicable United States securities laws and regulations.
Unite and Empiric are each organised under the laws of England and Wales. All of the officers and directors of Unite and Empiric are residents of countries other than the United States. It may therefore be difficult for US investors to enforce their rights and any claim arising out of US securities law. It may not be possible to sue Unite and Empiric (or their officers and directors) in a non-US court for violations of US securities laws. It may be difficult to compel Unite, Empiric and their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.
US holders of Empiric Shares also should be aware that the transaction contemplated herein may have tax consequences in the United States and that such consequences, if any, are not described herein. US holders of Empiric Shares are urged to consult with independent professional advisors regarding the legal, tax, and financial consequences of the Acquisition applicable to them.
In accordance with the Code, normal UK market practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Unite or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase Empiric Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition becomes Effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required by law or regulation in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com/exchange/news/market-news/market-news-home.
This Announcement does not constitute or form a part of any offer to sell or issue, or any solicitation of any offer to purchase, subscribe for or otherwise acquire, any securities in the United States.
Neither the US Securities and Exchange Commission nor any securities commission of any state or other jurisdiction of the United States has approved the Acquisition, passed upon the fairness of the Acquisition, or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the United States.
Notes regarding New Unite Shares
The New Unite Shares to be issued pursuant to the Scheme have not been and will not be registered under the US Securities Act of 1933 (as amended) or under the relevant securities laws of any state or territory or other jurisdiction of the United States or the relevant securities laws of Japan and the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada. No prospectus in relation to the New Unite Shares has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission. Accordingly, the New Unite Shares are not being, and may not be, offered, sold, resold, delivered or distributed, directly or indirectly in or into a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of relevant laws of, or require registration thereof in, such jurisdiction (except pursuant to an exemption, if available, from any applicable registration requirements or otherwise in compliance with all applicable laws).
The New Unite Shares have not been and will not be registered under the US Securities Act, or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States absent registration under the US Securities Act, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. It is expected that the New Unite Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act of 1933 (as amended) provided by Section 3(a)(10) thereof. For the purpose of qualifying for the exemption provided by Section 3(a)(10) of the US Securities Act, Unite will advise the Court that its sanctioning of the Scheme will be relied on by Unite for the purposes of a Section 3(a)(10) exemption following a hearing on the fairness of the Scheme to Empiric Shareholders.
Disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the Announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the Announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Forward-looking statements
This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition and other information published by Unite and Empiric contain statements which are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Unite and Empiric about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this Announcement may include statements relating to the expected effects of the Acquisition on Unite and Empiric, the expected timing of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "targets", "hopes", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases of similar meaning or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. These statements are based on assumptions and assessments made by Empiric, and/or Unite in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. Although Unite and Empiric believe that the expectations reflected in such forward-looking statements are reasonable, Unite and Empiric can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, among others the enactment of legislation or regulation that may impose costs or restrict activities; the renegotiation of contracts or licences; fluctuations in demand and pricing in the commercial property industry; changes in government policy and taxations; changes in political conditions, economies and markets in which Unite and Empiric operate; changes in the markets from which Unite and Empiric raise finance; the impact of legal or other proceedings; changes in accounting practices and interpretation of accounting standards under IFRS; changes in interest and exchange rates; industrial disputes; war and terrorism. These forward-looking statements speak only as at the date of this document.
Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Unite nor Empiric, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the FCA), neither Unite or Empiric is under any obligation, and Unite and Empiric expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
No profit forecasts or estimates
Other than the Unite 2025 Profit Forecast and Empiric 2025 Profit Forecast set out in Appendix 6 of this Announcement, no statement in this Announcement is intended as a profit forecast, profit estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Empiric or Unite for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Empiric or Unite respectively.
Quantified Financial Benefits Statement
The statements in the Quantified Financial Benefits Statement relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies and which may in some cases be subject to consultation with employees or their representatives. The synergies and cost savings referred to may not be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. For the purposes of Rule 28 of the Code, the Quantified Financial Benefits Statement contained in this Announcement is the responsibility of Unite and the Unite Directors.
Publication of this Announcement
A copy of this Announcement and the documents required to be published pursuant to Rules 26.1 and 26.2 of the Code will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions on Unite's website at www.unitegroup.com/possible-offer-for-empiric-student-property-plc and Empiric's website at www.empiric.co.uk/investors/unite-offer by no later than 12 noon (London time) on the Business Day following this Announcement.
The contents of Unite's website and Empiric's website, and any websites accessible from hyperlinks on those websites, are not incorporated into and do not form part of this Announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code, Empiric Shareholders and persons with information rights may request a hard copy of this Announcement by contacting Empiric's registrars, Computershare Investor Services PLC by writing to them at The Pavilions, Bridgewater Road, Bristol BS99 6ZZ, or by calling them on +44 (0) 370 703 6003. Calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.30 a.m. to 5.30 p.m. (London time), Monday to Friday (except public holidays in England and Wales). Please note that Computershare Investor Services PLC cannot provide any financial, legal or tax advice. Calls may be recorded and monitored for security and training purposes.
For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.
If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or from an independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.
Rule 2.9 of the Code
For the purposes of Rule 2.9 of the Code, Empiric confirms that, as at the Latest Practicable Date it had in issue 664,122,535 ordinary shares of one penny each. The ordinary shares are voting shares (each such ordinary share carries one vote per ordinary share) and are admitted to trading on the Main Market of the London Stock Exchange under the ISIN code GB00BLWDVR75.
For the purposes of Rule 2.9 of the Code, Unite confirms that, as at the Latest Practicable Date it had in issue 489,383,360 ordinary shares of 25 pence per share, each with voting rights and admitted to trading on the Main Market of the London Stock Exchange under the ISIN code GB0006928617.
Unite's LEI is 213800BBUUWVDH9YI827.
Empiric's LEI is 213800FPF38IBPRFPU87.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
14 August 2025
RECOMMENDED CASH AND SHARE ACQUISITION
of
EMPIRIC STUDENT PROPERTY PLC
by
THE UNITE GROUP PLC
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Introduction
The boards of directors of The Unite Group PLC ("Unite") and Empiric Student Property plc ("Empiric") are pleased to announce that they have reached agreement on the terms of a recommended cash and share offer pursuant to which Unite will acquire the entire issued and to be issued ordinary share capital of Empiric (the "Acquisition"). It is intended that the Acquisition will be effected by means of a scheme of arrangement under Part 26 of the Companies Act.
The Acquisition
Under the terms of the Acquisition, which will be conditional on the Conditions and certain further terms set out in Appendix 1 to this Announcement, and subject to the full terms and conditions which will be set out in the Scheme Document, for each Empiric Share held, the Scheme Shareholders will be entitled to receive:
0.085 New Unite Shares and 32 pence in cash
Based on Unite's closing share price of 732.0 pence as at the Latest Practicable Date, and excluding the Empiric Q2, Q3 and Q4 dividends which are expected to be declared and paid to Empiric Shareholders prior to the Effective Date (the "Empiric 2025 Dividends"), the Acquisition values each Empiric Share at approximately 94.2 pence and Empiric's entire issued and to be issued share capital at approximately £634 million. The terms of the Acquisition imply an EPRA NTA discount of 3.7 per cent. based on each of Unite's and Empiric's EPRA NTAs per share as at 30 June 2025 (excluding the Empiric 2025 Dividends).
Based on Unite's closing share price of 855.5 pence as at the Last Undisturbed Trading Date, and, in addition, the Empiric 2025 Dividends, the Acquisition values each Empiric Share at approximately 107.5 pence (the "Total Transaction Value") and Empiric's entire issued and to be issued share capital at approximately £723 million, representing:
· a premium of approximately 10 per cent. to Empiric's closing share price of 97.3 pence as at the Last Undisturbed Trading Date;
· a premium of approximately 22 per cent. to Empiric's three-month volume-weighted average price of 88.3 pence as at the Last Undisturbed Trading Date; and
· a premium of approximately 24 per cent. to Empiric's six-month volume-weighted average price of 86.6 pence as at the Last Undisturbed Trading Date.
Immediately following Completion, Empiric Shareholders will hold approximately 10 per cent. of the issued share capital of the Enlarged Group and existing Unite Shareholders will hold approximately 90 per cent. of the issued share capital of the Enlarged Group.
Background to and reasons for the Acquisition
Unite's strategy is to align its portfolio to high-quality universities (notably Russell Group universities) where it sees the strongest prospects for future growth in student demand and, therefore, sustainable prospects for rental growth. Unite's capital allocation aims to enhance this strategic alignment and therefore earnings growth and returns while maintaining balance sheet strength.
The long-term outlook for student numbers in the UK is strong, with the domestic 18-year-old population forecast to grow by 11 per cent. by 2030, and growth in international demand for higher education from which the UK's world-class higher education sector is well positioned to benefit.
The "returner" market of non-first year undergraduate and postgraduate students represents a large, attractive and generally unrealised growth opportunity which Unite has been tracking for some time. "Conventional" PBSA is well suited to first-year undergraduate student needs, but approximately one million students live in traditional houses of multiple occupation ("HMOs"), representing more than the entire first-year student population living away from home. Unite believes that a tailored product and service, offering greater independence and a more personal feel, while retaining the PBSA hallmarks of a high-quality, all-inclusive offer, would be highly attractive to returner students.
Unite has begun to adapt its PBSA offering to target the returner segment through a number of initiatives, including the 271-bed scheme at Bromley Place, Nottingham, tailored to second-year and third-year students as well as postgraduates, which completed in 2024, and the build-to-rent ("BTR") block at Burnet Point in Edinburgh which will be completed this summer.
Unite has tracked Empiric's progress in recent years and has been impressed by the way it has developed a high-quality, differentiated product offering for returner students under the Hello Student brand, with high NPS rankings. Empiric's product is more closely aligned with the preferences of returner students for smaller, characterful assets, offering single occupancy rooms or smaller cluster sizes, longer tenancies and increased independence. In addition, Unite notes the Empiric management team's successful execution of the portfolio transformation strategy, through which Empiric has aligned itself to some of the best locations in the UK's strongest university cities, where Unite also seeks to operate. A key attraction of the Empiric portfolio for Unite is the quality of assets in these key cities, which account for an outsized proportion of the value of the transaction.
Unite has considered a development-led strategy for increasing its exposure to the attractive segment for returner students. However, the Acquisition provides Unite with a more efficient route to scale, and at an entry price below estimated replacement cost. In addition, Unite is uniquely positioned to accelerate the growth of Empiric's returner focused portfolio through Unite's superior access to capital, its own highly experienced development team and platform, and the possible repositioning of 18 existing Unite assets on to the Empiric operating model and the Hello Student brand.
Besides the strategic benefits, the Acquisition provides scope for substantial cost synergies of £13.7 million on a risk-weighted basis. This consists of two parts. Increased scale in the 16 cities where the Unite and Empiric portfolios overlap, and combining front-line operations from each company, is expected to deliver £2.2 million of net operating cost synergies. The Enlarged Group will also benefit from a single corporate overhead structure with an additional £11.5 million of cost synergies expected to be realised through the streamlining and removal of duplicated group functions and public company costs. Unite expects to realise 55 per cent. of synergies in the first full year with the remainder in the second full year. Unite is confident in its ability to deliver these savings and has a successful track record of integration through its acquisition of Liberty Living in 2019, delivering £18 million of synergies.
In acquiring Empiric, Unite will retain all of Empiric's existing debt facilities on existing terms, and will retain a strong balance sheet by virtue of the majority share-based consideration.
In summary, the Board of Unite believes that the Acquisition has a compelling strategic and financial rationale for Unite and Empiric Shareholders, resulting in:
· a £10.5 billion combined portfolio (Unite share: £7.4 billion) in the UK's strongest universities, with c.75,000 beds on a combined basis of which 92 per cent. are located in Russell Group cities;
· a platform for expansion in the attractive returner segment through a proven platform (representing c.11 per cent. of the Enlarged Group's portfolio value, with scope to increase to c.15-20 per cent. over time through conversions and future acquisitions) delivering a significant increase in Unite's addressable market, and enabling Unite to attract and retain students throughout their academic journey including the c.35,000 first-year students currently living with Unite;
· a dedicated high-quality product and service offering under the Hello Student brand, tailored to the needs of returner students and aligned with the UK's strongest universities;
· significant cost synergies of £13.7 million unlocked though Unite's best-in-class operating platform;
· earnings and dividend accretion for both sets of shareholders, from the first full year of ownership for Empiric Shareholders and in the second full year of ownership for Unite Shareholders (neutral in the first) as synergies are delivered;
· a low double-digit unlevered IRR ahead of Unite's cost of capital and supporting total accounting returns of c.10 per cent. p.a.; and
· the maintenance of a high-quality balance sheet, with pro forma net debt / EBITDA of 5.9x, net LTV of 29 per cent., a weighted average cost of debt of 4.1 per cent., a weighted average debt maturity of 3.6 years and £570 million of undrawn debt facilities, in each case as at 30 June 2025 adjusted for the impact of the cash consideration.
Recommendation
The Empiric Directors, who have been so advised by Peel Hunt and Jefferies as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their financial advice to the Empiric Directors, Peel Hunt and Jefferies have taken into account the commercial assessments of the Empiric Directors.
Accordingly, the Empiric Directors intend unanimously to recommend that Empiric Shareholders vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting, as the Empiric Directors have irrevocably undertaken to do in respect of their own holdings of Empiric Shares, representing approximately 0.06 per cent. of Empiric's issued share capital as at the Latest Practicable Date).
Background to and reasons for the Recommendation
Background to the Acquisition
Empiric listed in June 2014 raising £85 million to invest in and develop high-quality student residential accommodation let on direct tenancy agreements with a focus on upper quartile rental values, primarily servicing postgraduate and international students. During the period to December 2017, Empiric raised a further £547 million to expand its portfolio of PBSA assets and grew its portfolio from 350 beds at the time of the IPO to 9,158 beds as at 31 December 2017.
Since 2020, Empiric's management team has undertaken a successful rationalisation of the Empiric business by disposing of approximately £155 million of non-core assets and increasing Empiric's geographical presence in prime regional cities aligned with higher-tariff and predominantly Russell Group universities. Furthermore, Empiric has transformed the capabilities of its differentiated business model, combining a refined and high-quality portfolio of PBSA with an in-house operational platform focused on offering its students a customer first philosophy through the Empiric Group's award-winning brand, Hello Student. The Empiric Board believes that Empiric continues to represent a compelling investment proposition for Empiric Shareholders, with a business model targeting investment in prime regional cities which attract students from the pools of international, postgraduate and returning undergraduates, whose premium accommodation requirements are relatively under-served by the wider PBSA market.
In the last three financial years, Empiric has benefitted from strong sales cycles which were enhanced by students resuming study programmes which they had postponed as a result of the Covid-19 pandemic. As the catch-up effects of the pandemic have now largely passed, Empiric and other PBSA operators, including Unite, have reported a normalisation of the sales cycle for academic year 2025/26 and hence a later booking profile. Based on market data available from StuRents, Empiric's occupancy rate continues to outperform the wider market month-on-month and therefore the Empiric Board continues to anticipate achieving an occupancy rate of 97 per cent. or better by end of the year.
Despite this robust performance, the Empiric Board notes some increasing market caution due to the normalisation of the sales cycle for academic year 2025/26 and a changing competitive and regulatory background due to new legislation such as the UK Government's policy updates to its student visa programmes and the Renters' Rights Bill. This is reflected in the Empiric share price which has traded at an average discount of 26 per cent. to its last reported EPRA NTA per share over the last 12 months to the Last Undisturbed Trading Date.
In the context of the Acquisition, the Empiric Board has considered the medium and long-term prospects for Empiric, and particularly the opportunities to increase the scale of the business materially in an accretive way to generate long-term, sustainable returns for Empiric Shareholders. Whilst the Empiric Board remains confident in its strategy, it acknowledges the macro-economic headwinds impacting the broader UK listed REIT market. These include, inter alia:
· dislocation of share prices from underlying operational and financial fundamentals;
· shareholders' desire for higher returns given the significant increase in risk free rates; and
· reduced access to capital, particularly for companies which are deemed to be "sub-scale" and/or trade at a persistent discount to net asset value.
This dynamic will increasingly hinder Empiric's ability to grow materially and exploit the opportunities presented by economies of scale and the corresponding ability to spread the fixed proportion of Empiric's administrative costs across a larger portfolio and revenue base. The Empiric Board believes that there are few near or medium-term catalysts to address these systemic challenges, which the Empiric Board believes could continue to weigh on Empiric's share price and to impede its access to capital. In this context, Empiric undertook an extensive process in 2024 to identify a joint venture partner to accelerate its strategic plans, which involved extensive discussions with a wide range of institutional capital providers, but ultimately did not result in a joint venture on acceptable terms being formed.
In response, Empiric undertook a successful equity raise in October 2024 at a price of 93 pence per share with strong support from existing and new Empiric Shareholders. As part of that process, the Empiric Board received a wide range of views from material Empiric Shareholders some of which, while acknowledging the benefits of increased scale for Empiric, noted that there may be limited appetite to support future fundraises if they were to be conducted at significant discounts to Empiric's prevailing net asset value. Given this dynamic, the price at which Empiric Shares have historically traded and the fact that Empiric has now completed its disposal programme of non-core assets, the Empiric Board believes that Empiric's options to fund its next stage of growth are likely to be limited in the near and medium-term.
Engagement with Unite
On 5 June 2025, in response to press speculation, the Empiric Board confirmed that, following a period of engagement with Unite, it had received a proposal from Unite on 29 May 2025 comprising 30 pence in cash and 0.09 new Unite Shares per Empiric Share (the "Original Proposal"). Based on Unite's closing share price of 855.5 pence on 4 June 2025, being the Last Undisturbed Trading Date, the Original Proposal valued each Empiric Share at 107.0 pence. On the basis of the Original Proposal, the Empiric Board agreed with Unite to enter an initial period of due diligence.
Following a period of due diligence, engagement with Unite Shareholders and extensive discussion with the Empiric Board, on 23 July 2025, Unite submitted a revised proposal comprising 32 pence in cash and 0.085 new Unite Shares with further clarity also provided on dividend entitlements prior to Completion (the "Revised Proposal"). The Revised Proposal (excluding dividends) therefore valued each Empiric Share at 104.7 pence, as at the Last Undisturbed Trading Date - a 2.1 per cent. reduction on the Original Proposal. It was made clear to Empiric that Unite, in finalising its view on valuation in the light of the due diligence exercise, was focused on, inter alia, delivering sufficient earnings accretion for the Enlarged Group, the operating margin for the current financial year, the slower pace of the 2025/26 booking cycle that has affected the UK PBSA sector as a whole, and the incremental costs of integrating the businesses, including - for example - to harmonise fire safety procedures and standards across the enlarged portfolio.
While the Empiric Board notes the lower value of the Revised Proposal, in forming its view, it has considered the following:
· the Total Transaction Value of 107.5 pence values Empiric's entire issued, and to be issued, ordinary share capital at approximately £723 million, representing:
o a premium of 10 per cent. to Empiric's closing share price of 97.3 pence on the Last Undisturbed Trading Date;
o a premium of 22 per cent. to Empiric's three-month volume weighted average closing share price of 88.3 pence as at the Last Undisturbed Trading Date;
o a premium of 16 per cent to the issue price for Empiric's October 2024 equity raise of 93 pence per Empiric Share;
o based on Unite's last reported EPRA NTA per Unite Share of 986 pence as at 30 June 2025, the terms of the Acquisition imply an EPRA NTA discount of 3.7. per cent. to Empiric's EPRA NTA per Empiric Share of 120.2 pence as at 30 June 2025 (excluding the Empiric 2025 Dividends);
· based on Unite's closing share price as at the Last Undisturbed Trading Date, approximately 69 per cent. of the Acquisition consideration is payable in New Unite Shares, providing Empiric Shareholders with a tax-efficient means of remaining invested in the UK PBSA sector via the enlarged vehicle with exposure to the expected strategic and financial benefits set out below;
· based on Unite's closing share price as at the Last Undisturbed Trading Date, approximately 31 per cent. of the Acquisition consideration is payable in cash, providing Empiric Shareholders with significant liquidity at a premium to Empiric's closing share price on the Last Undisturbed Trading Date, while underpinning the value of the Acquisition as a whole. In addition, on an EPRA NTA basis, the cash consideration allows Empiric Shareholders to realise the equivalent of approximately 27 per cent. of Empiric's EPRA NTA per Empiric Share of 120.2 pence as at 30 June 2025;
· Empiric Shareholders will be entitled to receive and retain the Empiric 2025 Dividends, retaining income through the offer period until Completion, and then will be expected to be eligible for the Unite dividend payable in respect of H1 2026 (further details regarding dividend entitlements are set out in paragraph 12 of this Announcement);
· the compelling financial effects of the combination for Empiric shareholders in respect of the New Unite Shares, including:
o participating in the synergy benefits arising from the Acquisition that Unite as an established, publicly listed PBSA operator of scale is uniquely qualified to deliver (as set out in further detail in Appendix 4 of this Announcement);
o material earnings and dividend accretion, with an implied uplift of 36 per cent. and 30 per cent. in earnings and dividends per share, respectively based on 2024 earnings and dividends, and prior to synergies;
· the significant enhancement in scale delivered through a £10.5 billion combined portfolio, comprising c.75,000 beds, in locations aligned with the UK's strongest universities, including meaningful exposure to the London PBSA market;
· the compelling strategic rationale for the combination of the two portfolios, creating a platform for expansion in the attractive returner segment through a proven platform (representing 11 per cent. of the Enlarged Group's portfolio value, with scope for further expansion over time through conversions and future acquisitions) delivering a significant increase in Unite's addressable market, and enabling Unite to attract and retain students throughout their academic journey including the c.35,000 first-year students currently living with Unite; and
· through holding shares in a FTSE 100 constituent with an investment grade credit rating, where the greater liquidity in the trading of Unite Shares compared with Empiric Shares would allow Empiric Shareholders to trade in and out of the Unite Shares should they wish to do so.
The Empiric Board has also reflected on the following:
· Unite's share price has reduced by 14 per cent. over the duration of the offer period and, based on Unite's closing share price as at the Latest Practicable Date, the implied value of the Acquisition is 94.2 pence for each Empiric Share, excluding dividends; and
· based on Unite's closing share price on the Latest Practicable Date, the Acquisition implies an absolute discount of 22 per cent. to Empiric's EPRA NTA per Empiric Share of 120.2 pence as at 30 June 2025.
The Empiric Board recognises the medium and long-term financial benefits of Empiric Shareholders becoming shareholders in Unite which, supported by the strategic merits of the combination, might reasonably be expected to drive appreciation in the Unite share price above the level at which the Unite Shares currently trade (near the five-year low), allowing Empiric Shareholders to capture anticipated future value in the student accommodation sector whilst reducing many of the associated uncertainties arising from a smaller operating platform and increasing liquidity. In addition, the Empiric Board assesses that on an EPRA NTA basis the cash portion of the consideration effectively enables Empiric Shareholders to realise approximately 27 per cent. of their holding at Empiric's EPRA NTA per Empiric Share of 120.2 pence as at 30 June 2025.
Taking all the above factors fully into consideration, the Empiric Board intends to recommend unanimously that Empiric Shareholders vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting.
Information on Unite
Unite was founded in 1991 in Bristol and has grown to become the UK's largest owner, manager, and developer of PBSA serving the country's world-leading higher education sector. Unite provides homes to 68,000 students across 152 properties in 23 leading university towns and cities. Unite also partners with over 60 universities across the UK, with 93 per cent of the rental portfolio by value in Russell Group cities. It is the Empiric assets in certain high-value cities, mainly Russell Group, which form a key part of the commercial attraction of the transaction for Unite.
In addition to Unite's wholly-owned portfolio, Unite has partnered successfully with private capital and other investors, including via a London-focused JV with GIC, the multi-investor fund USAF, and recently university partnerships with Newcastle University and Manchester Metropolitan University. Acquisitions have also formed a key part of the growth of the Unite business, most notably with the acquisition and successful integration of Liberty Living for £1.4 billion in 2019, leveraging Unite's operating platform and delivering £18 million of annual cost synergies.
Unite has delivered attractive returns for shareholders over many years, including annualised EPS growth of 10.5 per cent. over the last ten years. Unite has also consistently traded at a premium relative to other companies in the sector, with an average nil discount to last reported EPRA NTA per share. over the last three years and an approximate 12 per cent. premium over the last ten years. Today, Unite is a constituent of the FTSE 100 index with a market capitalisation of £4.2 billion as at the Last Undisturbed Trading Date.
Property valuation reports for Unite's portfolio, prepared in accordance with Rule 29 of the Code, are set out in Appendix 5.
Information on Empiric
Empiric is a FTSE 250 UK REIT listed on the equity shares (commercial companies) category of the Official List. Empiric owns a portfolio of 74 attractive and characterful operational PBSA assets in prime regional cities, including in particular Russell Group cities, which attract students from the growing pool of affluent international, postgraduate and returning undergraduates, whose premium accommodation requirements are relatively under-served by conventional PBSA providers. Empiric operates its assets through its Hello Student brand which in the 2024 Global Student Living Index was awarded Gold Operator Certification, with an NPS score of +32, well exceeding the average for University and Private Halls (+12 and +19 respectively).
Since 2018, Empiric has developed an efficient, in-house operational platform which has been designed to grow and create long-term sustainable returns for shareholders. Together with its clustering strategy, this has allowed Empiric to exploit economies of scale and improve its gross margin to 70 per cent. in its financial year to 31 December 2024, up from 57 per cent. in the financial year to 31 December 2017 prior to the initiation of the business transformation. In 2022, Empiric launched its first postgraduate exclusive product in Edinburgh and has since identified a total of 18 assets suitable for conversion to postgraduate exclusive accommodation, 6 of which are expected to be operational in 2026.
As at 30 June 2025, Empiric's portfolio was valued at £1.2 billion and comprised 74 operational assets and 7,717 student beds. As at the Last Undisturbed Trading Date, Empiric had a market capitalisation of £654 million.
A property valuation report for Empiric's portfolio, prepared in accordance with Rule 29 of the Code, is set out in Appendix 5.
Empiric current trading
Like most PBSA operators, Empiric has continued to experience a normalisation of the reservation pattern with revenue occupancy for academic year 2025/26 currently at 77 per cent compared to 92 per cent in the prior year. Whilst the later booking cycle presents challenges, Empiric is encouraged that occupancy remains ahead of the wider sector, as evidenced from data provided by StuRents, and remains in line with the company's pre-pandemic experience.
Further, Empiric notes the continued growth in student applications, with applications from China and the United States having risen 10 and 14 per cent, respectively year-on-year. With a significant proportion of beds booked by postgraduates, Empiric's reservation period extends through the autumn until the start of the January term. This supports the Empiric Board's continued belief that revenue occupancy of 97 per cent or better will be achieved for the next academic year.
Given this later booking pattern, the impact of dynamic pricing has been more muted relative to this point last year; however, Empiric still expects like-for-like rental growth to exceed four per cent for academic year 2025/26.
Empiric's EPRA EPS for the six-month period to 30 June 2025 was 2.2 pence per share, a decrease of 4.3 per cent on 30 June 2024. The decline follows an anticipated weakening in operating margin this period, alongside the temporary effect of Empiric's equity raise in late 2024. Empiric expects to reconfirm its earlier dividend guidance.
Empiric's property portfolio was valued at approximately £1.2 billion as at 30 June 2025, a like-for-like increase of 0.8 per cent. on 31 December 2024. Empiric's EPRA NTA as at 30 June 2025 was 120.2 pence per share, up 0.5 per cent. from 31 December 2024.
Intentions of Unite with regard to the business of Empiric
Strategic Plans
As set out in paragraph 3 above, Unite believes there is significant potential to continue and grow Empiric's successful operating model which is particularly attractive to returning and postgraduate students.
In order to deliver on this potential, prior to this Announcement, consistent with market practice, Unite has been granted access to various materials and to key individuals for the purposes of confirmatory due diligence. Following the Effective Date, Unite intends to work with Empiric's management to undertake a more detailed evaluation of Empiric's portfolio and its operations to formulate a detailed strategy, which may include select asset disposals. Unite expects that this evaluation will be completed within approximately nine months of the Effective Date.
Board composition and governance arrangements
It is intended that the current executive and non-executive directors of Empiric will resign from their roles upon or shortly following Completion. The composition of the Board of Unite is not expected to change following Completion and is expected to continue to comply with the UK Corporate Governance Code.
Management, employees and head office
Unite attaches great importance and value to the skills, experience and commitment of Empiric's employees and recognises that the employees of Empiric will continue to be an important factor in maximising the success and growth of the enlarged business.
Unite expects Empiric employees to continue to contribute to the success of Empiric under Unite ownership following the Effective Date and anticipates that they will benefit from greater opportunities as a result of the Acquisition.
Following the Acquisition becoming Effective, Unite confirms that the existing contractual and statutory employment rights of all Empiric Group employees will be honoured. Neither Unite nor Empiric has an existing defined benefits scheme. Unite intends to maintain the current Empiric pension scheme and current employer pension contribution levels for at least 12 months after Completion. Unite intends to align employment terms across the Enlarged Group within 24 months after Completion, subject to appropriate consultation and in accordance with applicable law.
The Unite Board intends to generate cost savings from both economies of scale and from the rationalisation of the Empiric Board and overlapping group functions and any other areas of duplication. Efficiencies in maintenance, management structures and payment processing fees are expected to contribute to operational savings of £2.2 million p.a. Expected overhead savings of £11.5 million are principally achieved through the removal of duplicated roles and activities, closing the Empiric offices and duplicated technology systems.
In order to achieve the full potential benefits of the Acquisition, within 9 months from Completion, the Unite Board intends to complete a detailed integration review of the business, operations and administration of Empiric, alongside the business, operations and administration of Unite, to assess how they can work most effectively and efficiently and how they will be best integrated and avoid any overlap or unnecessary duplication of function across the two businesses. Based on synergy planning, the Board anticipates significant levels of duplication across the Enlarged Group in respect of head office (including listed company) and operational functions with the reduction in headcount expected to be approximately 40 per cent. of Empiric's existing headcount and not exceed 7.5 per cent. of the Enlarged Group's headcount. The extent of rationalisation will depend upon the outcome of the Unite Board's review and options available to rationalise outsourced activities and Unite will carry out appropriate consultation on proposals in accordance with applicable law.
Post-Completion, Unite proposes to close Empiric's offices in London and Birmingham, consolidating activity at Unite's head office in Bristol, as its primary headquarters, and in London for certain group, investment and development functions. As part of this transition, it is anticipated that head office roles currently based at Empiric's head office in London and Empiric's Birmingham office will be based at Unite's existing offices in Bristol and London, following appropriate consultation and in accordance with applicable legal requirements. Unite does not intend to make use of Empiric's fixed assets, other than its property assets, following integration into Unite's business.
Save as described below, Unite has not entered into, nor had any discussions regarding, any form of incentive arrangements with members of Empiric's management and does not intend to have any such discussions before Completion.
Unite has agreed that Empiric may grant retention awards of up to £500,000 in aggregate (excluding employer's social security costs) to certain Empiric employees (which may include members of Empiric's management other than Empiric Directors or other members of the Empiric executive committee) whom Unite and Empiric consider it important to incentivise to remain with the Empiric Group for the purpose of protecting the business to be acquired pursuant to the Acquisition. Any such awards will be: (i) conditional on employment to the date of payment (save in cases of redundancy); (ii) capped at the higher of 75 per cent. of the annual salary of the applicable Empiric employee as at the date of this Agreement and £75,000; and (iii) paid as to 50 per cent. on 25 March 2026 and as to the remaining 50 per cent. upon the earlier of : (a) the date that is 12 months after the Effective Date; (b) the Long-Stop Date (if the Effective Date has not occurred by then); (c) the later of the date on which an employee is made redundant and 25 March 2026; (d) the later of the date on which the Acquisition lapses as a result of the CMA Condition not being satisfied or waived and 25 March 2026 if the lapse date is earlier; and (e) if the Scheme is not approved by the Scheme Shareholders at the Court Meeting, 25 March 2026.
Registered office
Following the Acquisition becoming Effective, the Enlarged Group will retain Unite's listing on the London Stock Exchange. The registered office of Unite will remain at South Quay, Temple Back, Bristol, United Kingdom, BS1 6FL until on or around 31 December 2025, at which point Unite intends to relocate its registered office to First Floor, Number One, Welcome Building, Bristol BS2 0PS.
Empiric Listing
Following the Acquisition becoming Effective, the Unite Board intends for applications to be made to the London Stock Exchange to cancel trading in Empiric Shares on the Main Market, and to the FCA to cancel the listing of Empiric Shares on the Official List, in each case with effect from or shortly following the Effective Date. Unite intends to re-register Empiric as a private company within 90 days of the Effective Date. Further details about the de-listing and cancellation of trading of Empiric Shares can be found in paragraph 14.
Research and development
Neither Unite nor Empiric operates a research and development function and there are no plans to establish such a function following Completion.
Irrevocable undertakings
Unite has received irrevocable undertakings from each of the Empiric Directors in respect of their own legal and/or beneficial holdings of Empiric Shares to vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting, in respect of a total of 384,091 Empiric Shares representing, in aggregate, approximately 0.06 per cent. of Empiric's issued share capital as at the Latest Practicable Date.
Further details of the irrevocable undertakings described above are set out in Appendix 3.
Empiric Share Plans
Empiric has established share plans which provide for the grant of awards to employees, including executive directors of Empiric.
The Acquisition will extend to any Empiric Shares which are unconditionally allotted or issued before the Scheme Record Time, including those allotted or issued as a result of the exercise of options under the Empiric Share Plans.
The Scheme will not extend to Empiric Shares issued after the Scheme Record Time. However, it is proposed to amend Empiric's articles of association at the General Meeting to provide that, if the Scheme becomes Effective, any Empiric Shares issued to any person after the Scheme Record Time (including in satisfaction of an option exercised under one of the Empiric Share Plans) will be automatically transferred to Unite in consideration for the payment by Unite to such persons of 0.085 New Unite Shares and 32 pence in cash for each Empiric Share so transferred.
Participants in the Empiric Share Plans will be contacted regarding the effect of the Acquisition on their options under the Empiric Share Plans and, where required, appropriate proposals will be made to such participants. Further details of such proposals will be set out in the Scheme Document and in separate letters to be sent to the participants in the Empiric Share Plans in due course.
Pre-Completion dividends
Following the Effective Date, Unite will continue to target sustainable growth in dividends, distributing 80 per cent. of its adjusted earnings each year via an interim dividend (representing approximately one third of the total expected dividend for the financial year) and a final dividend (comprising the remaining two thirds).
Unite's interim dividend in respect of the financial year ended 31 December 2025 was announced in July 2025, with such dividend to be paid in October 2025 to Unite Shareholders on the register of members as at a record date in September 2025 (the "Unite Interim Dividend"). Unite's final dividend in respect of the financial year ended 31 December 2025 is expected to be announced in February 2026, with such dividend to be paid in May 2026 to Unite Shareholders on the register of members as at a record date in April 2026 (the "Unite Final Dividend", together with the Unite Interim Dividend, the "Unite Permitted Dividends").
Based on the expected timetable for the Acquisition to become Effective, Empiric Shareholders who receive New Unite Shares pursuant to the Scheme will not be entitled to the Unite Interim Dividend, but may be entitled to the Unite Final Dividend, provided that they continue to hold such New Unite Shares on the relevant record date.
In order to facilitate the ongoing payment of ordinary course dividends to both Unite Shareholders and Empiric Shareholders up to and including the Effective Date, and to ensure that they each receive an amount in respect of the financial year ended 31 December 2025 that is equivalent to what they would have received had the Acquisition not occurred:
· Empiric Shareholders will be entitled to receive and retain any quarterly dividends in respect of the financial year ended 31 December 2025 that have been and will be announced, declared or paid by Empiric, provided that such dividends are payable in the ordinary course and are consistent with Empiric's past practice in relation to the payment of dividends as to timing and quantum (the "Empiric Permitted Dividends"); and
· in the event that Empiric Shareholders (who continue to hold their shares in the manner described above) become entitled to the Unite Final Dividend, Unite will have the right either (a): to reduce the value of the cash consideration of 32 pence for each Empiric Share by the amount by which Empiric Permitted Dividends (in aggregate) exceed 1.5 pence per Empiric Share; or (b) to declare and pay an equalising dividend to Unite Shareholders so as to reflect the amount by which Empiric Permitted Dividends (in aggregate) exceed 1.5 pence per Empiric Share.
If any other dividend or distribution or other return of value or payment other than the Empiric Permitted Dividends is authorised, declared, made or paid in respect of Empiric Shares on or after the date of this Announcement and with a record date before the Effective Date, Unite reserves the right to reduce the consideration payable for each Empiric Share under the Acquisition. If (but only to the extent) Unite exercises the above right in respect of a dividend, distribution or return of value, to adjust the consideration payable in respect of the Acquisition for the Empiric Shares in respect of all or any part of a dividend, distribution or other return of value that has not been paid, Empiric Shareholders shall be entitled to receive and retain any such dividend, distribution or other return of value declared, made or paid. Any exercise by Unite of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Scheme.
In addition, if any other dividend or distribution or other return of value or payment is made by Unite other than the Unite Permitted Dividends, Empiric may declare and pay an equalising dividend to Empiric Shareholders equal to the amount of all or part of any such other dividend, distribution or form of capital return, without any consequential change to the consideration.
In the event that the Effective Date occurs after the record date for the Unite Final Dividend, Unite and Empiric expect to implement such additional arrangements as may be required to facilitate the ongoing payment of ordinary course dividends to Unite Shareholders and Empiric Shareholders, as applicable, in respect of the period up to the Effective Date.
Structure of, and Conditions to, the Acquisition
It is intended that the Acquisition will be implemented by means of a court-sanctioned scheme of arrangement between Empiric and the Scheme Shareholders, under Part 26 of the Companies Act. The procedure involves, among other things, an application by Empiric to the Court to sanction the Scheme.
The purpose of the Scheme is to provide for Unite to become the owner of the entire issued and to be issued share capital of Empiric. In order to achieve this, the Scheme Shares will be transferred to Unite under the Scheme. In consideration for this transfer, the Scheme Shareholders will receive New Unite Shares and cash on the basis set out in paragraph 2 of this Announcement. The transfer to Unite of the Scheme Shares will result in Empiric becoming a wholly owned subsidiary of Unite.
The Scheme requires approval by Scheme Shareholders who are present and voting (and who are entitled to vote) by the passing of a resolution at the Court Meeting. This resolution must be approved by a majority in number of the Scheme Shareholders (or the relevant class or classes thereof, if applicable, unless all members of any such class have consented to be bound by the Scheme) present and voting, either in person or by proxy, at the Court Meeting, (or at any separate class meeting which may be required by the Court), representing not less than 75 per cent. in value of the Scheme Shares (or the relevant class or classes thereof, if applicable) voted.
Following the Court Meeting and the General Meeting, the Scheme must be sanctioned by the Court. Any Scheme Shareholder is entitled to attend the Court Sanction Hearing in person or through counsel to support or oppose the sanctioning of the Scheme. The Scheme will only become Effective upon delivery to the Registrar of Companies of a copy of the Court Order.
Conditions to the Acquisition
The Scheme and the Acquisition is subject to the Conditions and certain further terms referred to in Appendix 1 to this Announcement and to the full terms and conditions to be set out in the Scheme Document when issued, including, amongst other things:
(a) the approval by a majority in number of the Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting representing not less than 75 per cent. in value of the Scheme Shares voted;
(b) the passing of the Resolution required to approve and implement the Scheme by the requisite majority of Empiric Shareholders at the General Meeting;
(c) following the Court Meeting and General Meeting and satisfaction and/or waiver (where applicable) of the other Conditions, including the CMA Condition described in further detail below, the sanction of the Scheme by the Court (with or without modifications, on terms reasonably acceptable to Unite and Empiric); and
(d) following the sanction by the Court, the delivery of a copy of the Scheme Court Order to the Registrar of Companies.
Additionally, the Scheme will lapse if, amongst other things:
(a) the Court Meeting and General Meeting is not held on or before the 22nd day after the expected date of such meetings, which will be set out in the Scheme Document in due course (or such later date as may be agreed by Unite and Empiric with the consent of the Panel and, if required, the Court);
(b) the Court Sanction Hearing is not held on or before the 22nd day after the expected date of such hearing, which will be set out in the Scheme Document in due course (or such later date as may be agreed between Unite and Empiric);
(c) the Scheme does not become Effective on or before 11.59pm on the Long-Stop Date (or such later date as Unite and Empiric may, with the consent of the Panel, agree and, if required, the Court).
Unite may only invoke a Condition so as to cause the Acquisition not to proceed, lapse or to be withdrawn with the consent of the Panel. Certain Conditions are not subject to this requirement. Further details are set out in Parts A and B of Appendix 1.
Subject to the satisfaction of the CMA Condition and the other Conditions, Unite and Empiric currently expect that the Acquisition will become Effective by the second quarter of 2026.
CMA Condition
The Acquisition is conditional on the CMA Condition, being the satisfaction of either the CMA Phase 1 Clearance Condition or the CMA Phase 2 Clearance Condition. The CMA Condition has been included following specific negotiation between the parties.
Unite and Empiric do not intend to implement the Acquisition without CMA Phase 1 clearance, such clearance being provided either unconditionally or subject to undertakings in lieu of a Phase 2 CMA Reference ("UILs") offered by Unite which are reasonably satisfactory to Unite.
The CMA Phase 1 Clearance Condition could be invoked by Unite with the consent of the Panel if: (i) the CMA refers the Acquisition to a Phase 2 CMA Reference; or (ii) the CMA does not accept as sufficient any UILs offered by Unite which are reasonably satisfactory to Unite with the aim of securing Phase 1 clearance.
Scheme Shareholders should note that Unite intends to seek the Panel's consent to invoke the CMA Phase 1 Clearance Condition if the CMA would only be satisfied by the parties providing UILs in the form of disposals which are unacceptable to or not deliverable by the parties, as the integrity of Unite's post-Completion portfolio is an essential part of the strategic and economic rationale for the Acquisition. In particular, given Unite's strategy, certain Empiric assets in certain - mainly Russell Group - cities are of greater value than certain other assets, by virtue of their nature, location, etc., such that if UILs were to require the disposal of such assets that would not be reasonably satisfactory to Unite.
In addition, Unite intends to seek the Panel's consent to invoke the CMA Phase 1 Clearance Condition if the CMA refers the Acquisition to a Phase 2 CMA Reference, because the delays to Completion that would necessarily arise and which would result in prolonged uncertainty and cost for both parties.
Unite's intentions in this regard have been discussed with Empiric, which shares Unite's views of the material impact of such circumstances. Both the Empiric Board and the Unite Board considers the CMA Phase 1 Clearance Condition to be a material term of the Acquisition from the perspective of their respective shareholders.
If the Panel's consent to invoke the CMA Phase 1 Clearance Condition is not provided in the aforementioned circumstances and a Phase 2 CMA Reference is made, Unite intends to seek the Panel's consent to invoke the CMA Phase 2 Clearance Condition if: (i) the CMA does not clear the proposed Acquisition without any undertakings or conditions, or (ii) any undertakings or orders imposed or likely to be imposed by the CMA in order to allow the proposed Acquisition to proceed are not on terms reasonably satisfactory to Unite. The same considerations as detailed above in determining what UILs would be reasonably satisfactory to Unite equally apply to determining whether any terms of any undertakings or orders imposed by or likely to be imposed by the CMA following a Phase 2 Reference in order to clear the Acquisition would be reasonably satisfactory to Unite. In particular, if the terms the CMA imposes or is likely to impose the disposal of certain Empiric assets in certain - mainly Russell Group - cities, that would not be reasonably satisfactory to Unite.
A decision by the Panel whether to permit Unite to invoke a condition to the offer would be judged by the Panel by reference to the facts at the time that the relevant circumstances arise, including the views of the Empiric Board at the time.
Effect of Scheme becoming Effective
Once the Scheme becomes Effective, it will be binding on all Scheme Shareholders, whether or not they voted at the Court Meeting and the General Meeting and, if they did vote, whether or not they voted in favour of or against the Resolution proposed at those meetings.
Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document. It is expected that the Scheme Document will be despatched to Empiric Shareholders as soon as reasonably practicable and in any event within 28 days of this Announcement (unless otherwise agreed by the Panel, Unite and Empiric).
De-listing and re-registration
Applications will be made to the FCA for the cancellation of the listing of the Empiric Shares on the Official List and to the London Stock Exchange for the cancellation of the admission to trading of Empiric Shares on the Main Market. It is expected that such de-listing and cancellation of admission to trading would take effect on the Business Day after the Effective Date.
It is expected that the last day of dealings in, and for registration of transfers of, Empiric Shares (other than the registration of the transfer of the Scheme Shares to Unite pursuant to the Scheme) will be the last Business Day prior to the Effective Date, following which all of the Empiric Shares will be suspended from the Official List and from trading on the Main Market, and Empiric Shares will be disabled in CREST and no transfers shall be registered after this time.
After the Scheme Record Time and before the Scheme becomes Effective, entitlements to Empiric Shares in CREST will be cancelled and such entitlements dematerialised. On the Effective Date, all share certificates in respect of Empiric will cease to be valid and should be destroyed.
If the Scheme is sanctioned, any Empiric Shares held in treasury will be cancelled prior to the Scheme becoming Effective.
Unite intends to re-register Empiric as a private company as soon as it is appropriate to do so under the provisions of the Companies Act.
Settlement, listing and dealing in New Unite Shares
Once the Scheme has become Effective, New Unite Shares will be allotted to former Empiric Shareholders.
It is intended that applications will be made to the FCA and to the London Stock Exchange for the New Unite Shares to be admitted to the Equity Shares (Commercial Companies) category of the Official List and to trading on the Main Market. It is expected that admission of the New Unite Shares to the Official List and to trading on the Main Market will become effective, and that dealings for normal settlement in the New Unite Shares will commence, at 8.00 a.m. on the first Business Day after the date on which the Scheme becomes Effective.
The existing Unite Shares are admitted to CREST. It is expected that all of the New Unite Shares, when issued and fully paid, will be capable of being held and transferred by means of CREST.
Further details on listing, dealing and settlement will be included in the Scheme Document.
Fractions of New Unite Shares will not be allotted or issued pursuant to the Acquisition, but entitlements of Scheme Shareholders will be rounded down to the nearest whole number of New Unite Shares and all fractions of New Unite Shares will be aggregated and sold in the market as soon as practicable after the Effective Date. The net proceeds of such sale (after deduction of all expenses and commissions incurred in connection with the sale) will be distributed in due proportions to the Scheme Shareholders who would otherwise have been entitled to such fractions (rounded down to the nearest penny), save that individual entitlements to amounts of less than £5 will be retained for the benefit of the Enlarged Group.
Offer-related arrangements
Confidentiality Agreement
Unite and Empiric have entered into the Confidentiality Agreement pursuant to which Unite has undertaken, amongst other things: (a) to keep information relating to the Acquisition and to Empiric confidential and not to disclose it to third parties save where expressly permitted, including if required by law or regulation, or where such information is already in the public domain or lawfully in the receiving party's possession; and (b) to use the confidential information for the sole purpose of considering, evaluating, negotiating or implementing the Acquisition. These confidentiality obligations will remain in force until the earlier of: (i) two years from the date of the Confidentiality Agreement and (ii) the date of Completion. In addition, Unite has agreed to certain standstill restrictions for a period of 12 months from the date of the Confidentiality Agreement, including not acquiring any interest in securities of Empiric or making an offer for Empiric without Empiric's prior written consent, subject to customary exceptions, including where a recommended firm offer is announced or a third party makes or announces an offer for Empiric.
Reverse Confidentiality Agreement
Empiric and Unite have entered into the Reverse Confidentiality Agreement pursuant to which Empiric has undertaken, amongst other things: (a) to keep information relating to the Acquisition and to Unite confidential and not to disclose it to third parties save where expressly permitted, including if required by law or regulation, or where such information is already in the public domain or lawfully in the receiving party's possession; and (b) to use the confidential information for the sole purpose of considering, evaluating, negotiating or implementing the Acquisition. These confidentiality obligations will remain in force until the earlier of: (i) two years from the date of the Reverse Confidentiality Agreement and (ii) the date of Completion.
Limited Waiver of Privilege Side Letter
Unite and Empiric have entered into a side letter agreement, pursuant to which Unite acknowledges that certain information provided by Empiric may be subject to legal professional privilege and has undertaken, amongst other things to take such precautions to safeguard that information as it would for its own privileged material.
Clean Team Agreement
Unite and Empiric have entered into a Clean Team Agreement, which sets out how any Empiric confidential information that is competitively sensitive can be disclosed, used or shared for the purposes of due diligence, integration planning and/or regulatory analysis and any associated clearance processes by Unite. Such competitively sensitive information must only be shared with certain individuals or parties identified in the Clean Team Agreement, and those identified individuals or parties must keep that information confidential and secure, and ensure it is used only in connection with Unite's assessment and negotiation of the Acquisition. The Clean Team Agreement will terminate on the earlier of: (i) Completion; and (ii) three years from the date of the Clean Team Agreement.
Co-operation Agreement
Unite and Empiric have entered into the Co-operation Agreement, pursuant to which Unite has agreed to use its reasonable endeavours to obtain CMA clearance as soon as reasonably practicable following the date of the Co-operation Agreement and in sufficient time to allow the Effective Date to occur by the Long Stop Date. Unite and Empiric have also agreed to co-operate with each other, and Empiric has agreed to provide Unite with reasonable information, assistance and access, each in relation to seeking to secure the satisfaction of the CMA Condition.
Unite and Empiric have further agreed to provide each other with reasonable information, assistance and access for the preparation of certain parts of the key shareholder documentation, and to certain provisions in the event that the Scheme is switched to a Takeover Offer. Unite has also agreed to provide Empiric with certain information and assistance for the purposes of the Scheme Document.
The Co-operation Agreement records the intention of Unite and Empiric to implement the Acquisition by way of the Scheme, subject to Unite's right to switch to a Takeover Offer in certain circumstances.
The Co-operation Agreement may be terminated with immediate effect in the following circumstances, amongst others:
(a) if Unite and Empiric so agree in writing;
(b) upon written notice by Unite to Empiric if:
a. the Empiric directors cease to recommend the Acquisition to Empiric Shareholders; or
b. where the Acquisition is being implemented by the Scheme, (i) if the Empiric Shareholder Meetings are not held on or before the 22nd day after the expected date of the Empiric Shareholder Meetings (or such later date as may be agreed by Unite and Empiric or, in a competitive situation, specified by Unite with the consent of the Panel and, if required, the Court); or (ii) if the Court Sanction Hearing is not held on or before the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed by Unite and Empiric or, in a competitive situation, specified by Unite with the consent of the Panel and, if required, the Court);
(c) upon service of written notice by one party to the other party prior to the Long-Stop Date if:
a. a third party (not acting in concert with Unite) announces a firm intention to make an offer or revised offer for Empiric under Rule 2.7 of the Code, which completes, becomes effective or is declared or becomes unconditional;
b. a Condition is invoked by Unite where permitted by the Panel (if the Panel's permission is required);
c. any Condition (A) which has not been waived is or has become incapable of satisfaction by the Long Stop Date and Unite confirms it will not waive such condition, or (B) which is incapable of waiver has become incapable of satisfaction by the Long Stop Date and, with the permission of the Panel, is invoked or determined to be incapable of satisfaction; and/or
d. the Acquisition is withdrawn, terminated or lapses in accordance with its terms prior to the Long Stop Date and, where required, with consent of the Panel (except in certain limited circumstances);
(d) except following an election by Unite to implement the Acquisition by way of Takeover Offer, the Scheme is not approved by the requisite majority of holders of Scheme Shares at the Court Meeting and/or Empiric Shareholders at the Empiric General Meeting, or the Court definitively refuses to sanction the Scheme; or
(e) unless otherwise agreed by Unite and Empiric in writing or required by the Panel, the Effective Date has not occurred by the Long Stop Date.
The Co-operation Agreement also contains provisions that will apply in respect of the Empiric Share Plans.
Financing of the Acquisition
It is intended that the cash consideration payable by Unite to Empiric Shareholders under the terms of the Acquisition will be funded by Unite's undrawn facilities (£750 million as at 30 June 2025). For the purpose of ensuring certain funds, on 14 August 2025, Unite and Barclays Bank PLC (as mandated lead arranger, bookrunner and committed lender) entered into a commitment letter (the "Commitment Letter") in respect of an interim facility (the "IFA"). Further details of the Commitment Letter and the IFA will be set out in the Scheme Document.
Lazard, in its capacity as financial adviser to Unite, is satisfied that sufficient cash resources are available to Unite to satisfy in full the cash consideration payable to Empiric Shareholders under the terms of the Acquisition.
Further information on the financing of the Acquisition will be set out in the Scheme Document.
Unite dividend policy
Following Completion of the Acquisition, Unite will retain a tax-efficient REIT structure and as such, will be required to distribute a minimum of 90 per cent. of rental profits, calculated by reference to tax rather than accounting rules, as a Property Income Distribution ("PID"). Notwithstanding this, Unite will continue to target sustainable growth in dividends for its shareholders, and continue to target a payout ratio of 80 per cent. of its adjusted earnings each year as dividends.
Overseas shareholders
The distribution of this Announcement to, and the availability of the New Unite Shares to be issued pursuant to the Acquisition to persons not resident in the United Kingdom may be affected by the laws and regulations of the relevant jurisdiction. Such persons should inform themselves of and observe any applicable legal or regulatory requirements of their jurisdiction. Empiric Shareholders who are in doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay. Further details in relation to overseas shareholders will be contained in the Scheme Document.
This Announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, securities, nor is it a solicitation of any vote or approval in any jurisdiction, nor will there be any purchase or transfer of the securities referred to in this Announcement in any jurisdiction in contravention of applicable law or regulation.
Disclosure of interests in Empiric Shares
As at the close of business on the Latest Practicable Date, save for the irrevocable undertakings referred to in paragraph 10 above, neither Unite, nor any of the Unite Directors, nor, so far as Unite is aware, any person treated as acting in concert (within the meaning of the Code) with it for the purposes of the Acquisition:
· has any interest in, or right to subscribe for, any Empiric Shares nor does any such person have any short position in Empiric Shares, including any short position under a derivative, any agreement to sell, any delivery obligation or right to require another person to purchase or take delivery of any Empiric Shares; or
· has borrowed or lent any Empiric Shares or entered into any financial collateral arrangements relating to Empiric Shares; or
· is party to any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Code in relation to Empiric Shares or in relation to securities convertible or exchangeable into Empiric Shares,
and "interests in securities" for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person shall be treated as having an "interest" by virtue of their ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.
Documents available on website
Copies of the following documents are, or will shortly be made, available on Unite's website at www.unitegroup.com/investors/possible-offer-for-empiric-student-property-plc and on Empiric's website at www.empiric.co.uk/investors/unite-offer/ until the Scheme has become Effective or has lapsed or been withdrawn:
· this Announcement;
· the Confidentiality Agreement, Reverse Confidentiality Agreement and Limited Waiver of Privilege Side Letter;
· the Co-operation Agreement;
· the Clean Team Agreement;
· the irrevocable undertakings listed in Appendix 3;
· the documents entered into for the financing of the Acquisition referred to in paragraph 17 above;
· the consent letters from each of Lazard, Deutsche Numis, J.P. Morgan Cazenove, Peel Hunt and Jefferies;
· the valuation reports from each of Knight Frank, JLL, CBRE and Cushman & Wakefield as set out in Appendix 5 to this Announcement; and
· the consent and no material difference letters from each of Knight Frank, JLL, CBRE and Cushman & Wakefield.
Neither the contents of the websites referred to in this Announcement nor the contents of any website accessible from hyperlinks are incorporated into or form part of this Announcement.
General
Unite reserves the right, subject to the prior consent of the Panel and the terms of the Co-operation Agreement, to elect to implement the acquisition of the Empiric Shares by way of a Takeover Offer. In such event, such Takeover Offer will be implemented on the same terms (subject to appropriate amendments as described in Part C of Appendix 1 to this Announcement), so far as applicable, as those which would apply to the Scheme. Furthermore, if such Takeover Offer is made and sufficient acceptances of such Takeover Offer are received, when aggregated with Empiric Shares otherwise acquired by Unite, it is the intention of Unite to apply the provisions of section 979 of the Companies Act to acquire compulsorily any outstanding Empiric Shares to which such offer relates.
The Scheme will be governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Scheme will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the FCA.
Each of Lazard, Deutsche Numis, J.P Morgan Cazenove, Peel Hunt and Jefferies has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein to the references to its name and, where applicable, report in the form and context in which it is included.
The Acquisition is subject to the satisfaction or waiver (as applicable) of the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains sources and bases of certain information contained within this Announcement. Appendix 3 contains details of the irrevocable undertakings given to Unite in relation to the Acquisition.
Appendix 4 to this Announcement contains the Quantified Financial Benefits Statement, together with the reports from Grant Thornton, as reporting accountants to Unite for the purposes of the Quantified Financial Benefits Statement, and Lazard, as financial adviser to Unite for the purposes of the Quantified Financial Benefits Statement, as required under Rule 28.1(a) of the Code. Each of Grant Thornton and Lazard has given and not withdrawn its consent to the publication of its report in this Announcement in the form and context in which it is included. For the purposes of Rule 28 of the Code, the Quantified Financial Benefits Statement contained in Appendix 4 to this Announcement is the responsibility of Unite and the Unite Directors and not of the Empiric Directors.
Appendix 5 to this Announcement contains property valuations supported by valuation reports for Unite and Empiric as at 30 June 2025 pursuant to the requirements of Rule 29 of the Code. These property valuation reports will, subject to the requirements of the Code, be reproduced in the Scheme Document. Each of Knight Frank, JLL, CBRE and Cushman & Wakefield has given and not withdrawn their consent to the publication of their respective valuation reports in this Announcement in the form and context in which it is included.
For the purposes of Rule 29.5 of the Code, the Unite Board confirms that:
· Knight Frank has confirmed to them that in respect of the properties covered by their valuation report set out in Appendix 5 to this Announcement, there is no material difference between the values provided by Knight Frank as at 30 June 2025 and contained in their valuation report and the values that would have been stated were the valuation date the date of this Announcement;
· JLL has confirmed to them that in respect of the properties covered by their valuation report set out in Appendix 5 to this Announcement, there is no material difference between the values provided by JLL as at 30 June 2025 and contained in their valuation report and the values that would have been stated were the valuation date the date of this Announcement;
· CBRE has confirmed to them that in respect of the properties covered by their valuation report set out in Appendix 5 to this Announcement, there is no material difference between the values provided by CBRE as at 30 June 2025 and contained in their valuation report and the values that would have been stated were the valuation date the date of this Announcement; and
· Cushman & Wakefield has confirmed to it that an updated valuation of Empiric's portfolio of property assets as at the date of this Announcement would not be materially different from the valuation given by Cushman & Wakefield as at 30 June 2025 and contained in the Cushman & Wakefield valuation report set out in Appendix 5 to this Announcement. Certain Empiric operational assets are grouped in the Cushman & Wakefield valuation report for valuation purposes.
Appendix 6 contains details of the Unite 2025 Profit Forecast and Empiric 2025 Profit Forecast.
Appendix 7 contains the definitions of certain terms used in this Announcement.
In the event that either Unite or Empiric's property portfolio were to be sold at the valuations contained in the valuation reports set out in Appendix 5 to this Announcement, any gains realised on such disposals may be subject to taxation in the UK. Generally, disposals by a UK REIT of assets located in the UK held for the purpose of a property rental business should be exempt from UK corporation tax; however, there are specific rules which can result in assets held as part of the property rental business being subject to tax on disposal (for example when a property is materially developed and sold within three years of completion of that development). In connection with the Acquisition, it is not expected that the aforementioned tax liability will crystallise.
The Scheme Document and the Forms of Proxy accompanying the Scheme Document are expected to be sent to Empiric Shareholders within 28 days of this Announcement (or on such later time as Unite, Empiric and the Panel may agree). A copy of the Scheme Document is also expected to be sent (for information only) to persons with information rights and participants in the Empiric Share Plans at the same time as it is posted to Empiric Shareholders.
Analyst and investor presentation
Unite will host a presentation for analysts and investors today at 8:30 am (London time) to discuss the Acquisition.
To watch via webcast, please register and log in at the following: brrmedia.news/UTG_Aug25
Subject to certain restrictions, the slides used in the presentation will be available to all interested parties at www.unitegroup.com/investors/possible-offer-for-empiric-student-property-plc.
Enquiries:
Unite +44 (0) 117 302 7005
Joe Lister (Chief Executive Officer)
Michael Burt (Chief Financial Officer)
Saxon Ridley (Head of IR and Investment Finance)
Lazard (Lead Financial Adviser to Unite) +44 (0) 20 7187 2000
Patrick Long
Jolyon Coates
Harriet Wedmore
Deutsche Numis
(Joint Financial Adviser and Corporate Broker to Unite) +44 (0) 20 7260 1000
Heraclis Economides
Oliver Hardy
Oliver Ives
J.P. Morgan Cazenove
(Joint Financial Adviser and Corporate Broker to Unite) +44 (0) 20 3493 8000
Matt Smith
Paul Pulze
Saul Leisegang
Sodali & Co (Communications Adviser to Unite) +44 (0) 20 7250 1446
Justin Griffiths
Victoria Heslop
Louisa Henry
Empiric (via FTI Consulting)
Mark Pain (Non-Executive Chairman)
Duncan Garrood (Chief Executive Officer)
Donald Grant (Chief Financial & Sustainability Officer)
Peel Hunt (Joint Financial Adviser and Corporate Broker to Empiric) +44 (0) 20 7418 8900
Capel Irwin
Michael Nicholson
Henry Nicholls
Jefferies (Joint Financial Adviser and Corporate Broker to Empiric) +44 (0) 20 7029 8000
Tom Yeadon
Philip Noblet
Harry Le May
FTI Consulting (Communications Adviser to Empiric) +44 (0) 20 3727 1000
Dido Laurimore
Eve Kirmatzis
Herbert Smith Freehills Kramer LLP is acting as legal adviser to Unite in connection with the Acquisition.
Gowling WLG (UK) LLP is acting as legal adviser to Empiric in connection with the Acquisition.
Further information
This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase or otherwise acquire, subscribe for, sell, or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Empiric in any jurisdiction in contravention of applicable laws. The Acquisition will be implemented solely pursuant to the terms of the Scheme Document (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the Offer Document), which, together with the Forms of Proxy, will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any decision by Empiric Shareholders in respect of, or other response to, the Acquisition (including any vote in respect of the Resolution to approve the Acquisition, the Scheme or related matters), should be made only on the basis of the information contained in the Scheme Document (or, if the Acquisition is implemented by way of a Takeover Offer, the Offer Document).
This Announcement does not constitute a prospectus or prospectus equivalent document.
The person responsible for arranging for the release of this Announcement on behalf of Unite is Christopher Szpojnarowicz, Group Legal Director & Company Secretary, and on behalf of Empiric is Lisa Hibberd, Company Secretary.
The Acquisition will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the FCA.
Information relating to Empiric Shareholders
Please be aware that addresses, electronic addresses and certain other information provided by Empiric Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Empiric may be provided to Unite during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
Important Notices relating to the Financial Advisers
Lazard & Co., Limited ("Lazard") which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to Unite and no one else in connection with the Acquisition and will not be responsible to anyone other than Unite for providing the protections afforded to clients of Lazard nor for providing advice in connection with the Acquisition or any matter referred to herein. Neither Lazard nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this Announcement, any statement contained herein or otherwise.
Deutsche Bank AG is a stock corporation (Aktiengesellschaft) incorporated under the laws of the Federal Republic of Germany with its principal office in Frankfurt am Main. It is registered with the local district court (Amtsgericht) in Frankfurt am Main under No HRB 30000 and licensed to carry on banking business and to provide financial services. The London branch of Deutsche Bank AG is registered as a branch office in the register of companies for England and Wales at Companies House (branch registration number BR000005) with its registered branch office address and principal place of business at 21, Moorfields, London EC2Y 9DB. Deutsche Bank AG is subject to supervision by the European Central Bank (ECB), Sonnemannstrasse 22, 60314 Frankfurt am Main, Germany, and the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht or BaFin), Graurheindorfer Strasse 108, 53117 Bonn and Marie-Curie-Strasse 24-28, 60439 Frankfurt am Main, Germany. With respect to activities undertaken in the United Kingdom, Deutsche Bank AG is authorised by the Prudential Regulation Authority. It is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of Deutsche Bank AG's authorisation and regulation by the Prudential Regulation Authority are available from Deutsche Bank AG on request. Deutsche Bank AG, London Branch (trading for these purposes as Deutsche Numis) ("Deutsche Numis"), is acting exclusively for Unite and no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters in this Announcement and will not be responsible to anyone other than Unite for providing the protections afforded to clients of Deutsche Numis, nor for providing advice in relation to any matter referred to herein. Neither Deutsche Numis nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this Announcement, any statement contained herein or otherwise.
J.P. Morgan Securities PLC, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is authorised in the United Kingdom by the Prudential Regulation Authority (the "PRA") and regulated by the PRA and the Financial Conduct Authority, is acting exclusively for Unite and no one else in connection with the Acquisition and will not regard any other person as its client in relation to the Acquisition and will not be responsible to anyone other than Unite for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this Announcement.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser and corporate broker to Empiric and no one else in connection with the Acquisition and will not be responsible to anyone other than Empiric for providing the protections afforded to clients of Peel Hunt, nor for providing advice in connection with the Acquisition or any matter referred to herein. Neither Peel Hunt nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with this Announcement, any statement contained herein or otherwise.
Jefferies International Limited ("Jefferies"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser and corporate broker to Empiric and no one else in connection with the Acquisition and will not regard any other person as its client in relation to the matters in this Announcement and will not be responsible to any person other than Empiric for providing the protections afforded to clients of Jefferies nor for providing advice in connection with the Acquisition or in relation to any matter referred to in this Announcement. Neither Jefferies nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Jefferies in connection with this Announcement, any statement contained herein or otherwise.
Overseas shareholders
The release, publication or distribution of this Announcement in or into jurisdictions other than the United Kingdom may be restricted by law. Any persons who are not resident in the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Empiric Shares with respect to the Scheme at the Court Meeting, or to execute and deliver Forms of Proxy appointing another to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.
This Announcement has been prepared for the purpose of complying with English law, the Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.
Unless otherwise determined by Unite or required by the Code, and permitted by applicable law and regulation, the New Unite Shares to be issued pursuant to the Acquisition to Empiric Shareholders will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or form (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, any Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws of, or require registration thereof in, that jurisdiction. Persons (including without limitation nominees, trustees and custodians) receiving this Announcement or any formal documentation relating to the Acquisition must not mail or otherwise forward, distribute or send such documents in, into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition.
If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Acquisition will not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.
The availability of New Unite Shares pursuant to the Acquisition to Empiric Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements. Empiric Shareholders who are in any doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.
Further details in relation to Empiric Shareholders in overseas jurisdictions will be contained in the Scheme Document.
Notes to US investors in Empiric
Empiric Shareholders in the United States should note that the Acquisition relates to the shares of an English company and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, English law. Neither the proxy solicitation nor the tender offer rules under the US Securities Exchange Act of 1934, as amended, will apply to the Scheme. Moreover the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. However, if Unite were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer would be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Any such Takeover Offer would be made in the United States by Unite and no one else. In addition to any such Takeover Offer, Unite, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Empiric outside any such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act. Any information about any such purchases would be disclosed as required in the UK and, if relevant, would be reported to a Regulatory Information Service and would be available on the London Stock Exchange website at www.londonstockexchange.com.
Financial information included in this Announcement and the Scheme Document has been or will be prepared in accordance with IFRS and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. If Unite exercises its right to implement the Acquisition by way of a Takeover Offer in accordance with the terms of the Co-operation Agreement and determines to extend the offer into the United States, such offer will be made in compliance with applicable United States securities laws and regulations.
Unite and Empiric are each organised under the laws of England and Wales. All of the officers and directors of Unite and Empiric are residents of countries other than the United States. It may therefore be difficult for US investors to enforce their rights and any claim arising out of US securities law. It may not be possible to sue Unite and Empiric (or their officers and directors) in a non-US court for violations of US securities laws. It may be difficult to compel Unite, Empiric and their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.
US holders of Empiric Shares also should be aware that the transaction contemplated herein may have tax consequences in the United States and that such consequences, if any, are not described herein. US holders of Empiric Shares are urged to consult with independent professional advisors regarding the legal, tax, and financial consequences of the Acquisition applicable to them.
In accordance with the Code, normal UK market practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Unite or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase Empiric Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition becomes Effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required by law or regulation in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
This Announcement does not constitute or form a part of any offer to sell or issue, or any solicitation of any offer to purchase, subscribe for or otherwise acquire, any securities in the United States.
Neither the US Securities and Exchange Commission nor any securities commission of any state or other jurisdiction of the United States has approved the Acquisition, passed upon the fairness of the Acquisition, or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the United States.
Notes regarding New Unite Shares
The New Unite Shares to be issued pursuant to the Scheme have not been and will not be registered under the US Securities Act of 1933 (as amended) or under the relevant securities laws of any state or territory or other jurisdiction of the United States or the relevant securities laws of Japan and the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada. No prospectus in relation to the New Unite Shares has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission. Accordingly, the New Unite Shares are not being, and may not be, offered, sold, resold, delivered or distributed, directly or indirectly in or into a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of relevant laws of, or require registration thereof in, such jurisdiction (except pursuant to an exemption, if available, from any applicable registration requirements or otherwise in compliance with all applicable laws).
The New Unite Shares have not been and will not be registered under the US Securities Act, or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States absent registration under the US Securities Act, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. It is expected that the New Unite Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act of 1933 (as amended) provided by Section 3(a)(10) thereof. For the purpose of qualifying for the exemption provided by Section 3(a)(10) of the US Securities Act, Unite will advise the Court that its sanctioning of the Scheme will be relied on by Unite for the purposes of a Section 3(a)(10) exemption following a hearing on the fairness of the Scheme to Empiric Shareholders.
Disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the Announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the Announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Forward-looking statements
This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition and other information published by Unite and Empiric contain statements which are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Unite and Empiric about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this Announcement may include statements relating to the expected effects of the Acquisition on Unite and Empiric, the expected timing of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "targets", "hopes", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases of similar meaning or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. These statements are based on assumptions and assessments made by Empiric, and/or Unite in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. Although Unite and Empiric believe that the expectations reflected in such forward-looking statements are reasonable, Unite and Empiric can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, among others the enactment of legislation or regulation that may impose costs or restrict activities; the renegotiation of contracts or licences; fluctuations in demand and pricing in the commercial property industry; changes in government policy and taxations; changes in political conditions, economies and markets in which Unite and Empiric operate; changes in the markets from which Unite and Empiric raise finance; the impact of legal or other proceedings; changes in accounting practices and interpretation of accounting standards under IFRS; changes in interest and exchange rates; industrial disputes; war and terrorism. These forward-looking statements speak only as at the date of this document.
Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Unite nor Empiric, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the FCA), neither Unite or Empiric is under any obligation, and Unite and Empiric expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
No profit forecasts or estimates
Other than the Unite 2025 Profit Forecast and Empiric 2025 Profit Forecast set out in Appendix 6 of this Announcement, no statement in this Announcement is intended as a profit forecast or profit estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Empiric or Unite for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Empiric or Unite respectively.
Quantified Financial Benefits Statement
The statements in the Quantified Financial Benefits Statement relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies and which may in some cases be subject to consultation with employees or their representatives. The synergies and cost savings referred to may not be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. For the purposes of Rule 28 of the Code, the Quantified Financial Benefits Statement contained in this Announcement is the responsibility of Unite and the Unite Directors.
Publication of this Announcement
A copy of this Announcement and the documents required to be published pursuant to Rules 26.1 and 26.2 of the Code will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions on Unite's website at www.unitegroup.com/possible-offer-for-empiric-student-property-plc and Empiric's website at www.empiric.co.uk/investors/unite-offer by no later than 12 noon (London time) on the Business Day following this Announcement.
The contents of Unite's website and Empiric's website, and any websites accessible from hyperlinks on those websites, are not incorporated into and do not form part of this Announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code, Empiric Shareholders and persons with information rights may request a hard copy of this Announcement by contacting Empiric's registrars, Computershare Investor Services PLC by writing to them at The Pavilions, Bridgewater Road, Bristol BS99 6ZZ, or by calling them on +44 (0) 370 703 6003. Calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.30 a.m. to 5.30 p.m. (London time), Monday to Friday (except public holidays in England and Wales). Please note that Computershare Investor Services PLC cannot provide any financial, legal or tax advice. Calls may be recorded and monitored for security and training purposes.
For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.
If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or from an independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.
Rule 2.9 of the Code
For the purposes of Rule 2.9 of the Code, Empiric confirms that, as at the Latest Practicable Date it had in issue 664,122,535 ordinary shares of one penny each. The Ordinary Shares are voting shares (each such ordinary share carries one vote per ordinary share) and are admitted to trading on the Main Market of the London Stock Exchange under the ISIN code GB00BLWDVR75.
For the purposes of Rule 2.9 of the Code, Unite confirms that, as at the Latest Practicable Date it had in issue 489,383,360 ordinary shares of 25 pence per share, each with voting rights and admitted to trading on the Main Market of the London Stock Exchange under the ISIN code GB0006928617.
Unite's LEI is 213800BBUUWVDH9YI827.
Empiric's LEI is 213800FPF38IBPRFPU87.
Appendix 1
CONDITIONS to AND CERTAIN FURTHER TERMS OF THE ACQUISITION
Part A: Conditions to the Scheme and Acquisition
Long Stop Date
1. The Acquisition is conditional upon the Scheme becoming unconditional and becoming Effective, subject to the provisions of the Code, on or before 11.59 p.m. on the Long-Stop Date or such later date (if any) as Unite and Empiric may, with the consent of the Panel, agree and (if required) the Court may allow.
Scheme Approval
2. The Scheme will be conditional on:
(a)
i. its approval by a majority in number of the Scheme Shareholders (or relevant classes thereof, if applicable) on the register of members at the Voting Record Time present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting (or at any separate class meeting which may be required by the Court), or at any adjournment thereof, representing not less than 75 per cent. in value of the Scheme Shares (or the relevant class or classes thereof, if applicable) voted by such Scheme Shareholders; and
ii. the Court Meeting (and any separate class meeting which may be required by the Court, if applicable) or any adjournment of any such meeting being held on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course or such later date (if any) as Unite and Empiric may, with the consent of the Panel, agree and, if required, the Court may allow);
(b)
i. all resolutions required to approve and implement the Scheme being duly passed by the requisite majority of the Empiric Shareholders at the General Meeting, or at any adjournment thereof; and
ii. the General Meeting being held on or before the 22nd day after the expected date of such meetings to be set out in the Scheme Document in due course (or such later date (if any) as Unite and Empiric may, with the consent of the Panel, agree and the Court may approve, if such approval is required);
(c)
i. the sanction of the Scheme by the Court (with or without modifications, on terms reasonably acceptable to Unite and Empiric) and an office copy of the Court Order being delivered for registration to the Registrar of Companies; and
ii. the Court Sanction Hearing being held on or before the 22nd day after the expected date of the hearing date to be set out in the Scheme Document in due course (or such later date as may be agreed by Unite and Empiric with the consent of the Panel, and if required, the Court).
Additional Conditions to the Scheme
3. Subject to the requirements of the Panel, the Acquisition is also conditional on the following Conditions having been satisfied or, where applicable, waived and accordingly the necessary actions to make the Scheme effective will not be taken unless such Conditions (as amended if relevant) have been so satisfied or waived:
Admission of New Unite Shares
(a) (i) the FCA having acknowledged to Unite or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New Unite Shares to the Official List listed in the Equity Shares (Commercial Companies) category has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject ("listing conditions")) will become effective as soon as a dealing notice has been issued by the FCA and any listing conditions having been satisfied; and
(ii) the London Stock Exchange having acknowledged to Unite or its agent (and such acknowledgement not having been withdrawn) that the New Unite Shares will be admitted to trading on the Main Market;
CMA Condition
(b) either:
(i) the CMA issuing a decision in terms reasonably satisfactory to Unite that it is not the CMA's intention to subject the proposed acquisition of Empiric by Unite or any matter arising therefrom or related thereto or any part of it to a reference under section 33 of the EA (a "Phase 2 CMA Reference"), such decision being either unconditional or conditional on the CMA's acceptance of UILs offered by Unite under section 73 EA which are reasonably satisfactory to Unite (or the applicable time period for the CMA to issue either decision having expired without it having done so and without it having made a Phase 2 CMA Reference) ("CMA Phase 1 Clearance Condition"); or
(ii) in the event that a Phase 2 CMA Reference is made, written confirmation having been received from the CMA that either:
(X) the proposed acquisition of Empiric by Unite may proceed without any undertakings or conditions; or
(Y) the CMA has decided to accept undertakings from, or imposed an order, on Empiric and/or Unite in order to allow the proposed acquisition of Empiric by Unite and any matter arising therefrom or relating thereto to proceed, provided such undertakings or orders are on terms reasonably satisfactory to Unite,
("CMA Phase 2 Clearance Condition").
Regulatory clearances and Third Party clearances
(c) no Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same), or having enacted, made or proposed any statute, regulation, decision or order, or change to published practice or having taken any other step, and there not continuing to be outstanding any statute, regulation, decision or order, which in each case would or might reasonably be expected to:
(i) require or prevent or materially delay the divestiture or materially alter the terms for any proposed divesture by any member of the Wider Unite Group or any member of the Wider Empiric Group of all or any material portion of their respective businesses, assets or property or impose any limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any part thereof which, in each case, is material in the context of the Wider Unite Group or the Wider Empiric Group in either case taken as a whole or in the context of the Acquisition;
(ii) impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Unite Group or Wider Empiric Group to directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Wider Empiric Group or the Wider Unite Group which, in each case, is material in the context of the Wider Unite Group or the Wider Empiric Group in either case taken as a whole or in the context of the Acquisition;
(iii) otherwise materially adversely affect the business, assets, profits or prospects of any member of the Wider Unite Group or of any member of the Wider Empiric Group to an extent which is material in the context of the Wider Unite Group or the Wider Empiric Group in either case taken as a whole or in the context of the Acquisition;
(iv) make the Acquisition or its implementation (or the acquisition or proposed acquisition by Unite or any member of the Wider Unite Group of any shares or other securities in, or control of Empiric) void, illegal, and/or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, delay or otherwise interfere with the same, or impose additional conditions or obligations with respect thereto;
(v) except pursuant Chapter 3 of Part 28 of the Companies Act, require any member of the Wider Unite Group or the Wider Empiric Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Empiric Group or the Wider Unite Group owned by any third party;
(vi) materially adversely limit the ability of any member of the Wider Empiric Group or Wider Unite Group to co-ordinate its business, or any part of it, with the businesses of any other members which is adverse to and material in the context of the Wider Empiric Group or Wider Unite Group taken as a whole or in the context of the Acquisition; or
(vii) result in any member of the Wider Empiric Group or Wider Unite Group ceasing to be able to carry on business under any name under which it presently does so,
and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Empiric Shares having expired, lapsed or been terminated;
Notifications, waiting periods and Authorisations
(d) all notifications, filings or applications which are reasonably considered necessary by both Unite and Empiric having been made, all applicable waiting periods (including any extensions thereof) under any applicable legislation or regulations of any jurisdiction having expired, lapsed or been terminated, in each case in respect of the Acquisition or, except pursuant to Chapter 3 of Part 28 of the Companies Act, the acquisition of any Empiric Shares, or of control of Empiric, by Unite, and all Authorisations reasonably considered necessary by both Unite and Empiric in any jurisdiction for, or in respect of, the Acquisition and the proposed acquisition of any Empiric Shares, or of control of Empiric, by Unite and to carry on the business of any member of the Wider Unite Group or of the Wider Empiric Group having been obtained, in terms and in a form satisfactory to Unite and Empiric, from all appropriate Third Parties and from any persons or bodies with whom any member of the Wider Unite Group or the Wider Empiric Group has entered into contractual arrangements and all such Authorisations remaining in full force and effect at the time at which the Acquisition becomes Effective and Unite having no knowledge of an intention or proposal to revoke, suspend or modify or not to renew any of the same and all necessary statutory or regulatory obligations in any jurisdiction having been complied with where, in each case absence of such Authorisation would have a material adverse effect on the Wider Empiric Group or the Wider Unite Group in each case taken as a whole;
Certain matters arising as a result of any arrangement, agreement etc.
(e) save as Disclosed, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Empiric Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, or any circumstance which in consequence of the Acquisition or the proposed acquisition of any shares or other securities (or equivalent) in Empiric or because of a change in the control or management of Empiric or otherwise, could or might result in any of the following to an extent which is material and adverse in the context of the Wider Empiric Group, or the Wider Unite Group, in either case taken as a whole, or in the context of the Acquisition:
(i) any moneys borrowed by or any other indebtedness or liabilities (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being terminated or adversely modified or affected or any obligation or liability arising or any adverse action being taken or arising thereunder;
(iii) any asset or interest of any such member being or failing to be disposed of or charged or ceasing to be available to any such member or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any such member otherwise than in the ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interest of any such member;
(v) the rights, liabilities, obligations or interests of any such member, or the business of any such member with, any person, firm, company or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or affected;
(vi) the value of any such member or its financial or trading position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business under any name under which it presently does so; or
(viii) the creation or acceleration of any liability, actual or contingent, by any such member (including any material tax liability or any obligation to obtain or acquire any material authorisation, notice, waiver, concession, agreement or exemption from any Third Party or any person) other than trade creditors or other liabilities incurred in the ordinary course of business or in connection with the Acquisition,
and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Empiric Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would or might reasonably be expected to result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) of this Condition;
Certain events occurring since Last Accounts Date
(f) save as Disclosed, no member of the Wider Empiric Group having, since the Last Accounts Date:
(i) save as between Empiric and wholly-owned subsidiaries of Empiric or for Empiric Shares issued under or pursuant to the exercise of options and vesting of awards granted under the Empiric Share Plans, issued or agreed to issue, authorised or proposed the issue of additional shares of any class;
(ii) save as between Empiric and wholly-owned subsidiaries of Empiric or for the grant of options and awards and other rights under the Empiric Share Plans, issued or agreed to issue, authorised or proposed the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;
(iii) save for intra-Empiric Group transactions, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, disposal, transfer, mortgage, charge or security interest, in each case, other than in the ordinary course of business and, in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(iv) save for intra-Empiric Group transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(v) issued, authorised or proposed the issue of, or made any change in or to, any debentures or (save for intra-Empiric Group transactions), save in the ordinary course of business, incurred or increased any indebtedness or become subject to any contingent liability;
(vi) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraphs (i) or (ii) above, made any other change to any part of its share capital in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(vii) save for intra-Empiric Group transactions and other than pursuant to the Acquisition, implemented, or authorised, proposed or announced its intention to implement, any reconstruction, merger, demerger, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business, in each case, to the extent material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(viii) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long-term, onerous or unusual nature or magnitude or which involves or could involve an obligation of such a nature or magnitude other than in the ordinary course of business, in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(ix) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or steps or had any legal proceedings started or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, manager, trustee or similar officer of all or any part of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed, in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(x) entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the Wider Empiric Group or the Wider Unite Group other than of a nature and extent which is normal in the context of the business concerned;
(xi) waived or compromised any claim otherwise than in the ordinary course of business which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(xii) other than in connection with the Scheme, made any material alteration to its memorandum or articles of association or other incorporation documents (other than where such alteration does not introduce unusual or onerous provisions which may be material in the context of the Acquisition);
(xiii) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business, in each case, to the extent material in the context of the Wider Empiric Group taken as a whole;
(xiv) entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or proposed to, effect any of the transactions, matters or events referred to in this Condition (f);
(xv) made or agreed or consented to any change to:
(A) the terms of the trust deeds constituting the pension scheme(s) established by any member of the Wider Empiric Group for its directors, employees or their dependents;
(B) the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder;
(C) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or
(D) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued or made,
in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(xvi) proposed, agreed to provide or modified the terms of any of the Empiric Share Plans or other benefit constituting a material change relating to the employment or termination of employment of a material category of persons employed by the Wider Empiric Group or which constitutes a material change to the terms or conditions of employment of any senior employee of the Wider Empiric Group, save as agreed by the Panel (if required) and by Unite, or which constitutes a material change to the terms or conditions of employment of any director or senior executive;
(xvii) on or after the date of this Announcement, other than with the consent of Unite and (if required) the Panel, taken (or agreed to take) any action which requires, or would require, the approval of Empiric Shareholders in a general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code;
(xviii) entered into or varied in a material way the terms of, any contracts, agreement or arrangement with any of the directors or senior executives of any members of the Wider Empiric Group; or
(xix) waived or compromised any claim which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition, otherwise than in the ordinary course of business;
No material adverse change
(g) save as Disclosed, since the Last Accounts Date:
(i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider Empiric Group which, in any such case, is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Empiric Group is or may become a party (whether as a plaintiff, defendant or otherwise) and (other than as a result of the Acquisition) no enquiry, review or investigation by, or complaint or reference to, any Third Party or other investigative body against or in respect of any member of the Wider Empiric Group having been instituted, announced, implemented or threatened by or against or remaining outstanding in respect of any member of the Wider Empiric Group which in any such case has had or might reasonably be expected to have a material adverse effect on the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(iii) no contingent or other liability of any member of the Wider Empiric Group having arisen or become apparent to Unite or increased which has had or might reasonably be expected to have a material adverse effect on the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(iv) no member of the Wider Empiric Group having conducted its business in breach of any applicable laws and regulations and which is material in the context of the Wider Empiric Group as a whole or in the context of the Acquisition; and
(v) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence or permit held by any member of the Wider Empiric Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which has had, or would reasonably be expected to have, an adverse effect which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
No discovery of certain matters
(h) save as Disclosed, Unite not having discovered:
(i) that any financial, business or other information concerning the Wider Empiric Group as contained in the information publicly disclosed at any time by or on behalf of any member of the Wider Empiric Group is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make that information not misleading and which was not subsequently corrected before the date of this Announcement by disclosure either publicly or otherwise to Unite or its professional advisers, in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(ii) that any member of the Wider Empiric Group or partnership, company or other entity in which any member of the Wider Empiric Group has a significant economic interest and which is not a subsidiary undertaking of Empiric, is subject to any liability (contingent or otherwise) which is not disclosed in the Empiric Annual Report and Accounts, in each case, to the extent which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition; or
(iii) any information which affects the import of any information Disclosed at any time by or on behalf of any member of the Wider Empiric Group and which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(i) save as Disclosed, Unite not having discovered that:
(i) any past or present member of the Wider Empiric Group has failed to comply with any and/or all applicable legislation or regulation, of any jurisdiction with regard to the use, treatment, handling, storage, carriage, disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters or the health and safety of humans, or that there has otherwise been any such use, treatment, handling, storage, carriage, disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) any of which storage, carriage, disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) or cost on the part of any member of the Wider Empiric Group and which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(ii) there is, or is likely to be, for any reason whatsoever, any liability (actual or contingent) of any past or present member of the Wider Empiric Group to make good, remediate, repair, reinstate or clean up any property or any controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present member of the Wider Empiric Group (or on its behalf) or by any person for which a member of the Wider Empiric Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest, under any environmental legislation, regulation, notice, circular or order of any Third Party and which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition;
(iii) circumstances exist (whether as a result of the making of the Acquisition or otherwise) which would be reasonably likely to lead to any Third Party instituting, or whereby any member of the Wider Unite Group or any present or past member of the Wider Empiric Group would be likely to be required to institute, an environmental audit or take any other steps which would in any such case be reasonably likely to result in any liability (whether actual or contingent) to improve, modify existing or install new plant, machinery or equipment or carry out changes in the processes currently carried out or make good, remediate, repair, re-instate or clean up any land or other asset currently or previously owned, occupied or made use of by any past or present member of the Wider Empiric Group (or on its behalf) or by any person for which a member of the Wider Empiric Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest which is material in the context of the Wider Empiric Group taken as a whole or in the context of the Acquisition; and
Anti-corruption, economic sanctions, criminal property and money laundering
(j) save as Disclosed, Unite not having discovered that:
(i) any past or present member, director, officer or employee of the Wider Empiric Group is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption or anti-bribery law, rule or regulation or any other applicable law, rule, or regulation concerning improper payments or kickbacks or any person that performs or has performed services for or on behalf of the Wider Empiric Group is or has at any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption or anti-bribery law, rule or regulation or any other applicable law, rule, or regulation concerning improper payments or kickbacks;
(ii) any asset of any member of the Wider Empiric Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition) or proceeds of crime under any other applicable law, rule, or regulation concerning money laundering or proceeds of crime or any member of the Wider Empiric Group is found to have engaged in activities constituting money laundering under any applicable law, rule, or regulation concerning money laundering;
(iii) any past or present member, director, officer or employee of the Wider Empiric Group, or any other person for whom any such person may be liable or responsible, is or has engaged in any conduct which would violate applicable economic sanctions or dealt with, made any investments in, made any funds or assets available to or received any funds or assets from:
(A) any government, entity or individual in respect of which US, UK or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by US, UK or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control, or HM Treasury's Office of Financial Sanctions; or
(B) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the United Kingdom, the European Union or any of its member states, save that this shall not apply if and to the extent that it is or would be unenforceable by reason of breach of any applicable Blocking Law;
(iv) any past or present member, director, officer or employee of the Wider Empiric Group, or any other person for whom any such person may be liable or responsible:
(A) has engaged in conduct which would violate any relevant anti-terrorism laws, rules, or regulations, including but not limited to the U.S. Anti-Terrorism Act;
(B) has engaged in conduct which would violate any relevant anti-boycott law, rule, or regulation or any applicable export controls, including but not limited to the Export Administration Regulations administered and enforced by the U.S. Department of Commerce or the International Traffic in Arms Regulations administered and enforced by the U.S. Department of State;
(C) has engaged in conduct which would violate any relevant laws, rules, or regulations concerning human rights, including but not limited to any law, rule, or regulation concerning false imprisonment, torture or other cruel and unusual punishment, or child labour; or
(D) is debarred or otherwise rendered ineligible to bid for or to perform contracts for or with any government, governmental instrumentality, or international organisation or found to have violated any applicable law, rule, or regulation concerning government contracting or public procurement; or
(v) any member of the Wider Empiric Group is or has been engaged in any transaction which would cause Unite to be in breach of any law or regulation upon its acquisition of Empiric, including but not limited to the economic sanctions of the United States Office of Foreign Assets Control, or HM Treasury's Office of Financial Sanctions, or any other relevant government authority.
For the purposes of these Conditions the "Wider Empiric Group" means Empiric and its subsidiary undertakings, associated undertakings and any other undertaking in which Empiric and/or such undertakings (aggregating their interests) have a significant interest and the "Wider Unite Group" means Unite and its subsidiary undertakings, associated undertakings and any other undertaking in which Unite and/or such undertakings (aggregating their interests) have a significant interest and for these purposes subsidiary undertaking and undertaking have the meanings given by the Companies Act, associated undertaking has the meaning given by paragraph 19 of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, other than paragraph 19(1)(b) of Schedule 6 to those regulations which shall be excluded for this purpose, and significant interest means a direct or indirect interest in 20 per cent. or more of the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act).
Part B: Waiver and Invocation of the Conditions
1. The Conditions contained in paragraphs 1 to 3 inclusive above, and the full terms and conditions which will be set out in the Scheme Document, must be fulfilled, be determined by Unite to be or remain satisfied or (if capable of waiver) be waived by Unite by 11.59 p.m. on the date immediately preceding the Court Sanction Hearing, failing which the Scheme shall lapse.
2. To the extent permitted by law and subject to the requirements of the Panel, Unite reserves the right in its sole discretion to waive, in whole or in part, all or any of the Conditions above and to proceed with the Court Sanction Hearing prior to the fulfilment, satisfaction or waiver of any of the Conditions above, except for (i) Conditions 1, 2(a)(i), 2(b)(i), 2(c)(i), and 3(a) - 3(c) (inclusive) which cannot be waived and (ii) Condition 3(d) which can only be waived with the consent of Unite and Empiric. If any of Conditions 2(a)(ii), 2(b)(ii) or 2(c)(ii) is not satisfied by the relevant deadline specified in the relevant Condition, Unite shall make an announcement by 8.00 am on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition, waived the relevant deadlines or agreed with Empiric to extend the deadline in relation to the relevant Condition.
3. Unite shall be under no obligation to waive or treat as fulfilled any of the Conditions capable of waiver by a date earlier than the latest date specified for the fulfilment thereof, notwithstanding that the other Conditions may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.
4. Under Rule 13.5(a) of the Code, Unite may only invoke a Condition to the Acquisition so as to cause the Acquisition not to proceed or to be withdrawn with consent of the Panel. The Panel will normally only give its consent if the circumstances which give rise to the right to invoke the Condition are of material significance to Unite in the context of the Acquisition.
5. Any condition that is subject to Rule 13.5(a) of the Code may be waived by Unite.
6. The Conditions set out in paragraph 1 (subject to Rule 12) and paragraph 2 of Part A of Appendix 1 (and, if applicable, any offer acceptance condition adopted on the basis specified in paragraph 1 of Part C below if the Acquisition is implemented by way of a Takeover Offer) are not subject to Rule 13.5(a) of the Code.
7. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.
8. If Unite is required by the Panel to make an offer or offers for Empiric Shares under the provisions of Rule 9 of the Code, Unite may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule.
Part C: Certain further terms of the Acquisition
1.
|
2. The Scheme and the Acquisition and any dispute or claim arising out of, or in connection with, them (whether contractual or non-contractual in nature) will be governed by English law and will be subject to the jurisdiction of the Courts of England. The Acquisition will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the FCA and the UK Listing Rules.
3. The Empiric Shares will be acquired under the Acquisition fully paid and free from all liens, equitable interests, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights attaching thereto, including, without limitation, voting rights and the right to receive and retain, in full, all dividends and other distributions (if any) declared, made, paid or payable or any other return of capital made, on or after the date of this Announcement other than any Empiric Permitted Dividend.
4. Save for any Empiric Permitted Dividend, if any dividend or other distribution or other return of value is proposed, declared, made, paid or becomes payable by Empiric in respect of an Empiric Share on or after the date of this Announcement and on or prior to the Effective Date and which has a record date on or prior to the Effective Date, Unite will have the right to reduce the value of the consideration payable for each Empiric Share by up to the amount per Empiric Share of such dividend, distribution, return of value except where the Empiric Share is or will be acquired pursuant to the Scheme on a basis which entitles Unite to receive the dividend, distribution or return of value and to retain it. If any such dividend or distribution or return of value is paid or made after the date of this Announcement and Unite exercises its rights described above, any reference in this Announcement to the consideration payable under the Scheme shall be deemed to be a reference to the consideration as so reduced. If (but only to the extent) Unite exercises the above right in respect of a dividend, distribution or return of value, to adjust the consideration payable in respect of the Acquisition for the Empiric Shares in respect of all or any part of a dividend, distribution or other return of value that has not been paid, Empiric Shareholders shall be entitled to receive and retain any such dividend, distribution or other return of value declared, made or paid. Any exercise by Unite of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Scheme.
5. The availability of the New Unite Shares to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.
6. The New Unite Shares to be issued under the Scheme will be issued credited as fully paid and will rank pari passu with the issued ordinary shares in Unite, including the right to receive in full all dividends and other distributions, if any, declared, made or paid after the Scheme Effective Time.
7. Fractions of New Unite Shares will not be allotted or issued pursuant to the Acquisition, but entitlements of Scheme Shareholders will be rounded down to the nearest whole number of New Unite Shares and all fractions of New Unite Shares will be aggregated and sold in the market as soon as practicable after the Effective Date. The net proceeds of such sale (after deduction of all expenses and commissions incurred in connection with the sale) will be distributed in due proportions to the Scheme Shareholders who would otherwise have been entitled to such fractions (rounded down to the nearest penny), save that individual entitlements to amounts of less than £5 will be retained for the benefit of the Enlarged Group.
8. Except with the Panel's consent, settlement of the consideration to which any Scheme Shareholder is entitled under the Scheme will be implemented in full in accordance with the terms of the Scheme without any lien, right of set-off, counterclaim or other analogous right to which Unite may otherwise be, or claim to be, entitled as against such Scheme Shareholder and will be effected in the manner described in this Announcement.
Appendix 2
Sources and bases of information
In this Announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:
1. The financial information relating to Unite is extracted from its results for the half year ended 30 June 2025, released on 29 July 2025.
2. The financial information relating to Empiric is extracted from its results for the half year ended 30 June 2025, released on 14 August 2025.
3. Combined pro forma portfolio and financial information has been derived from figures in the sources referenced in paragraphs 1 and 2 above.
4. All closing share prices quoted for Unite Shares and Empiric Shares have been derived from the Daily Official List of the London Stock Exchange and represent the closing middle market quotations of the relevant shares on the relevant date(s).
5. Volume-weighted average prices for Empiric Shares are derived from data provided by Bloomberg for the relevant time periods.
6. As at the Latest Practicable Date, Empiric's entire issued and to be issued share capital consisted of 672,566,142 Empiric Shares, being the sum of: (a) the 664,122,535 Empiric Shares in issue as at the Latest Practicable Date; and (b) 8,443,607 Empiric Shares which may be issued on or after the date of this Announcement on the exercise of options or vesting of awards under the Empiric Share Plans.
7. As at the Latest Practicable Date, Unite's enlarged issued and to be issued share capital following Completion will consist of 548,019,482 Unite Shares, being the sum of: (a) the 489,383,360 Unite Shares in issue as at the Latest Practicable Date; (b) 1,468,000 Unite Shares which may be issued on or after the date of this Announcement on the exercise of options or vesting of awards under the Unite Share Plans; and (c) the 57,168,122 New Unite Shares that will be issued to Empiric Shareholders based on the exchange ratio of 0.085 New Unite Shares for each Empiric Share and Empiric's issued and to be issued share capital as described above.
8. The Total Transaction Value is based on the Acquisition consideration of 0.085 New Unite Shares and 32 pence in cash for each Empiric Share plus the anticipated Empiric 2025 Dividends of 0.925 pence each (based on Empiric's target minimum dividend of 3.7 pence per Empiric Share for the financial year ended 31 December 2025 less the Empiric Q1 dividend).
9. References to the percentage of the Acquisition consideration payable in shares or in cash, or to the percentage of an Empiric shareholding that can be realised in cash based on Empiric's EPRA NTA, are calculated excluding the value of the anticipated Empiric 2025 Dividends.
10. For Empiric, the EPRA NTA as at 30 June 2025 has been calculated by reference to the Cushman & Wakefield valuation report in respect of Empiric's property portfolio, adjusted as set out below:
|
|
£m |
|
Value of Empiric's property portfolio per Cushman & Wakefield valuation report |
1,160.4 |
|
Fair value adjustments* |
0.7 |
|
Fair value of property portfolio |
1,161.1 |
|
Cash and cash equivalents |
38.4 |
|
Drawn debt |
(374.3) |
|
Other net liabilities |
(17.8) |
|
EPRA NTA |
807.4 |
|
Total Empiric Shares in issue, including contingently issuable shares |
671.7m** |
|
EPRA NTA per Empiric Share (p) |
120.2 |
* Fair value adjustments of £0.7 million reflect the present value of future minimum lease payments required on leasehold properties.
**This number excludes (i) 480,469 Empiric Shares which may be issued as dividend equivalents under issued option awards, and (ii) 377,026 Empiric Shares the subject of awards which are intended to be subject to net-settlement arrangements.
11. For Unite, the EPRA NTA as at 30 June 2025 has been calculated by reference to the CBRE, JLL and Knight Frank valuation reports in respect of Unite's share of the property portfolio, adjusted as set out below:
|
|
£m |
|
Unite share of portfolio per CBRE's valuation report |
5,101.3 |
|
Unite share of portfolio per JLL's valuation report |
691.5 |
|
Unite share of portfolio per Knight Frank's valuation report* |
766.7 |
|
Investment properties (leased) |
69.8 |
|
Assets classified as held for sale** |
111.9 |
|
Fair value adjustments*** |
(31.5) |
|
Total property portfolio |
6,709.7 |
|
Drawn debt on properties |
(1,905.4) |
|
Lease liabilities |
(65.1) |
|
Cash |
188.8 |
|
Net Debt |
(1,781.7) |
|
Other net liabilities |
(76.9) |
|
Intangible assets |
(11.2) |
|
EPRA NTA |
4,839.9 |
|
Total Unite Shares in issue, including contingently issuable shares |
490,851,360 |
|
EPRA NTA per Unite Share (p) |
986.0 |
*Includes £0.8m of assets classified as held for sale.
** Includes £24.0m of USAF assets at share.
*** Fair value adjustments of (£31.5 million) reflect fire safety and other adjustments.
12. Implied EPRA NTA discounts are calculated by applying the exchange ratio of 0.085 New Unite Shares per Empiric Share to Unite's EPRA NTA per share of 986.0 pence as at 30 June 2025, with the addition of the 32 pence in cash, as compared to Empiric's EPRA NTA per Empiric Share of 120.2 pence as at 30 June 2025.
13. Unite's average premium to last reported EPRA NTA per Unite Share over the last three and ten years is based on daily share price data from FactSet and the last reported audited year end or unaudited interim EPRA NTA per Unite Share figures released by Unite at the relevant date. Last three year and ten-year periods are defined with reference to the Last Undisturbed Trading Date.
14. Unite's annualised EPS growth over the last ten years is based on EPRA earnings per Unite Share of 17.2 pence for the year ended 31 December 2014 and 46.6 pence for the year ended 31 December 2024.
15. Growth in the domestic 18-year-old population is based on forecasts from Office for National Statistics 2020-based Interim National Population Projections.
16. The estimated number of students living in traditional HMOs and the entire first-year student population living away from home are based on HESA (Higher Education Statistics Agency) Table 57 ("Full-time HE student enrolments by HE provider and term-time accommodation").
17. Cost synergies for Unite's acquisition of Liberty Living in 2019 are as set out on pages 13 and 17 of Unite's 2020 Annual Report.
18. The implied uplift in earnings per share for Empiric Shareholders in respect of the New Unite Shares, based on 2024 earnings, is calculated using Unite's and Empiric's 2024 EPRA earnings, the offer exchange ratio of 0.085 and the proportion of the Acquisition consideration consisting of New Unite Shares that is implied by Unite's closing share price as at the Latest Practicable Date.
19. The implied uplift in dividend per share for Empiric Shareholders in respect of the New Unite Shares, based on 2024 dividends, is calculated using Unite's and Empiric's 2024 dividends per share, the offer exchange ratio of 0.085 and the proportion of the Acquisition consideration consisting of New Unite Shares that is implied by Unite's closing share price as at the Latest Practicable Date.
20. Empiric's average discount to last reported EPRA NTA per share over the last 12 months is based on daily share price data from FactSet and the last reported audited year end or unaudited interim EPRA NTA per share figures released by Empiric at the relevant date. Last 12 months is defined with reference to the Last Undisturbed Trading Date.
21. Certain figures in this Announcement have been subject to rounding adjustments.
Appendix 3
IRREVOCABLE UNDERTAKINGS
A. Irrevocable undertakings from Empiric Directors
The following Empiric Directors have given irrevocable undertakings to, amongst other things, vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting in relation to the following Empiric Shares currently registered or beneficially held by them as well as any further Empiric Shares which they may become the registered or beneficial owner of or otherwise interested in, save for any Empiric Shares which they acquire pursuant to the exercise of options under the Empiric Student Property PLC SAYE Option Plan (to the extent applicable):
|
Name of Empiric Director |
Number of Empiric Shares |
Percentage of issued share capital of Empiric (per cent.) |
|
Mark Pain |
120,000 |
0.02% |
|
Duncan Garrood |
150,438 |
0.02% |
|
Donald Grant |
54,053 |
<0.01% |
|
Alice Avis |
59,600 |
<0.01% |
|
TOTAL |
384,091 |
0.06% |
The obligations of these Empiric Directors under the irrevocable undertakings they have given shall lapse and cease to have effect if:
(a) the Scheme Document is not despatched to Empiric Shareholders within 28 days from the date of this Announcement except as permitted by the Code, or such later date as may be agreed by Empiric and Unite, other than where Unite has subsequently elected (in accordance and subject to the terms of the Co-operation Agreement and the consent of the Panel) to proceed with the implementation of the Offer by way of a Takeover Offer;
(b) where Unite has elected (in accordance with and subject to the terms of the Co-operation Agreement and the consent of the Panel) to proceed with the implementation of the Offer by way of a Takeover Offer on or before the date referred to in paragraph (b) above, the Offer Document is not despatched to Empiric Shareholders within 28 days of the date of the publication of the announcement announcing the change in structure (or such later time as may be agreed in accordance with and subject to the terms of the Co-operation Agreement and the consent of the Panel);
(c) Unite announces, with the Panel's consent, that it does not intend to make or proceed with the Offer and no new replacement scheme or Takeover Offer is announced by Unite at the same time;
(d) the Scheme (or Takeover Offer as the case may be) lapses or is withdrawn or otherwise terminates in accordance with its terms without having become effective (in the case of the Scheme) or wholly unconditional (in the case of a Takeover Offer), other than in circumstances where the Scheme lapses or is withdrawn as a result of Unite exercising, in accordance with and subject to the terms of the Co-operation Agreement and with the consent of the Panel, its right to implement the Offer by way of a Takeover Offer;
(e) the date on which any competing offer for the entire issued and to be issued share capital of Empiric is declared unconditional or, if implemented by way of a scheme of arrangement, becomes effective; or
(f) the date on which the Acquisition becomes effective in accordance with its terms (if implemented as a Scheme) or becomes or is declared unconditional (if implemented by way of a Takeover Offer).
Appendix 4
QUANTIFIED FINANCIAL BENEFITS STATEMENT
Part A
Paragraph 3 of this Announcement includes statements of estimated cost synergies arising from the Acquisition (the "Quantified Financial Benefits Statement"). A copy of the Quantified Financial Benefits Statement is set out below:
Quantified Financial Benefits Statement
The Unite Directors, having reviewed and analysed the potential cost synergies of the Acquisition, and taking into account the factors they can influence, believe that the Enlarged Group can deliver approximately £13.7 million of pre-tax recurring cost synergies on an annual run-rate basis.
Approximately 55 per cent. of the annual run-rate benefit is expected to be realised in the first full year following Completion. Approximately 100 per cent of the run-rate benefit is expected to be realised from the start of the second full year following Completion.
The quantified cost synergies, which are expected to originate from the cost bases of both Unite and Empiric, are expected to be realised primarily from:
· Operating cost synergies: The increased size of the Enlarged Group's portfolio will provide benefits at a city and cluster level, enabling Unite to leverage its existing teams and achieve efficiencies in procuring and delivering outsourced services. Operating net cost synergies are expected to account for approximately £2.2 million of the identified annual synergies; and
· Central overhead cost synergies: The Enlarged Group will benefit from a single corporate overhead structure. Cost synergies will be realised through the streamlining and removal of duplicated group functions and public company costs. Central overhead cost synergies are expected to account for approximately £11.5 million of the identified annual synergies.
The Unite Directors estimate that the realisation of the quantified cost synergies will result in one-off costs to achieve of approximately £13.9 million, with around 85 per cent. incurred in the first full year following Completion and the remainder by the end of the second full year following Completion.
Potential areas of dis-synergy expected to arise in connection with the Acquisition have been considered and were determined by the Unite Directors to be immaterial for the analysis.
The identified cost synergies will accrue as a direct result of the Acquisition and would not be achieved on a standalone basis. The identified cost synergies reflect both the beneficial elements and relevant costs.
For the purposes of Rule 28 of the Takeover Code, the Quantified Financial Benefits Statement contained in this Announcement is the responsibility of Unite and the Unite Directors.
Bases of Belief
The Unite management team has worked to identify, challenge and quantify potential synergies as well as the potential costs to achieving, and the timing of, such synergies. Where appropriate, assumptions were used to estimate the costs of implementing the new structures, systems and processes required to realise the synergies. Such assumptions and the assessment and quantification of potential synergies, costs of achieving and timing have been informed by the Unite management teams' industry expertise, knowledge and experience of integrating Liberty Living in 2019.
In preparing the Quantified Financial Benefits Statement, Empiric has shared certain operational and financial information to facilitate the analysis in support of evaluating the potential synergies expected to arise from the Acquisition. In circumstances where the scope of data exchanged or the individuals having access to it has been limited for commercial reasons, confidentiality considerations, legal or regulatory restrictions, or other reasons, Unite has made estimates and assumptions to aid its development of individual synergy initiatives.
In general, the synergy assessments have been risk adjusted.
The Acquisition is subject to CMA clearance. It is not possible to predict with certainty the outcome of the CMA clearance process and therefore any potential impact has not been quantified.
The cost bases used as the basis for the Quantified Financial Benefits Statement is the forecast cost bases of each of Unite and Empiric for the financial year ended 31 December 2025.
These statements of estimated synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the estimated synergies referred to may not be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.
The Unite Directors have, in addition, made the following assumptions:
Assumptions within Unite's control or influence:
· Unite will remain a company with its ordinary shares listed on the Closed-Ended Investment Funds category of the Official List maintained by the Financial Conduct Authority, and traded on the Main Market of the London Stock Exchange, and will retain its status as a UK REIT.
· There will be no material impact on the underlying operations of either Unite or Empiric or their ability to continue to conduct their businesses, including as a result of, or in connection with, the integration of Empiric by Unite.
· There will be no material divestments from either the Unite or Empiric existing businesses.
· The cost synergies are substantively within Unite's control, albeit certain elements are dependent in part on negotiations with third parties.
Assumptions outside of Unite's control or influence:
· There will be no changes to macroeconomic, political, regulatory or legal conditions in the markets or regions in which Unite and Empiric operate that will materially impact on the implementation or costs to achieve the proposed cost savings.
· There will be no change in tax legislation or tax rates or other legislation in the UK that could materially impact the ability to achieve any benefits.
Reports
As required by Rule 28.1(a) of the Code, (i) Grant Thornton, as reporting accountant to Unite has provided a report stating that, in its opinion, the Quantified Financial Benefits Statement has been properly compiled on the basis stated, and (ii) Lazard, as financial adviser to Unite, has provided a report stating that, in its opinion, the Quantified Financial Benefits Statement has been prepared with due care and consideration. Copies of these reports are included at Parts B and C of this Appendix 4. Each of Grant Thornton and Lazard has given and not withdrawn its consent to the publication of its report in this Announcement in the form and context in which it is included pursuant to Rule 23.2 of the Code.
Notes
These statements are not intended as a profit forecast and should not be interpreted as such. Neither the Quantified Financial Benefits Statement nor any other statement in this Announcement should be construed as a profit forecast or interpreted to mean that Unite's earnings in the first full year following Completion, or in any subsequent period, will necessarily match or be greater than or be less than those of Unite and Empiric for the relevant preceding financial period or any other period.
Due to the scale of the Enlarged Group, there may be additional changes to Unite's operations or Empiric's operations following the proposed Acquisition. As a result, and given the fact that the changes relate to the future, the resulting synergies may be materially greater or less than those estimated.
Part B
Report from Grant Thornton UK Advisory & Tax LLP on the Quantified Financial Benefits Statement
|
Grant Thornton UK Advisory & Tax LLP 8 Finsbury Circus London |
EC2M 7EA
The Unite Directors
The Unite Group PLC
South Quay House
Temple Back
Bristol
BS1 6FL
and
Lazard & Co Limited
20 Manchester Square London
W1U 3PZ
14 August 2025
Dear Sir/Madam
The Unite Group PLC (the Company) firm intention to make an offer for Empiric Student Property plc (the Target) - Report on the Quantified Financial Benefits Statement
We report on the statement made by the directors of the Company (the Unite Directors) on the quantified financial benefits set out in the announcement issued by the Company dated 14 August 2025 (the Announcement) (the Statement). The Statement, and the material assumptions upon which it is based, are set out in Part A of Appendix 4 to the Announcement.
Opinion
In our opinion, the Statement has been properly compiled on the basis stated.
The Statement has been made in the context of the disclosures in pages 1 and 2 of Part A of Appendix 4 of the Announcement setting out the basis of the Unite Directors' belief (including the principal assumptions and sources of information) supporting the Statement and their analysis and explanation of the underlying constituent elements.
This report is required by Rule 28.1(a)(i) of the City Code on Takeovers and Mergers (the Takeover Code) and is given for the purpose of complying with that requirement and for no other purpose.
Responsibilities
It is the responsibility of the Unite Directors to prepare the Statement in accordance with the requirements of the Takeover Code.
It is our responsibility to form an opinion as required by Rule 28.1(a)(i) of the Takeover Code as to the proper compilation of the Statement and to report that opinion to you.
Save for any responsibility arising under Rule 28.1(a)(i) of the Takeover Code to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report, which is required by and given solely for the purposes of complying with, Rule 28.1(a)(i) of the Takeover Code, or our statement consenting to its inclusion in the Announcement.
Basis of Preparation of the Statement
The Statement has been prepared on the basis stated on pages 1 and 2 of Part A of Appendix 4 of the Announcement.
Basis of opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the Financial Reporting Council in the United Kingdom. We are independent in accordance with relevant ethical requirements, which in the United Kingdom is the Financial Reporting Council's Ethical Standard as applied to Investment Circular Reporting Engagements, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We have discussed the Statement, together with the underlying plans and relevant bases of belief (including sources of information and assumptions), with the Unite Directors.
Our work did not involve any independent examination of any of the financial or other information underlying the Statement.
We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Statement has been properly compiled on the basis stated.
We do not express any opinion as to the achievability of the benefits identified by the Unite Directors in the Statement.
Since the Statement and the principal assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we express no opinion as to whether the actual benefits achieved will correspond to those anticipated in the Statement and the differences may be material.
Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside the United Kingdom, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.
Yours faithfully
Grant Thornton UK Advisory & Tax LLP
Part C
Report from Lazard & Co., Limited on the Quantified Financial Benefits Statement
The Directors of The Unite Group PLC (the "Unite Directors")
South Quay House
Temple Back
Bristol BS1 6FL
14 August 2025
Dear Unite Directors,
We refer to the Quantified Financial Benefits Statement, the bases of belief thereof and the notes thereto (together, the "Statement") made by Unite as set out in Part A of Appendix 4 to this Announcement, for which the Unite Directors are solely responsible under Rule 28 of the City Code on Takeovers and Mergers (the "Code").
We have discussed the Statement (including the assumptions and sources of information referred to therein), with the Unite Directors and those officers and employees of Unite who developed the underlying plans, as well as with Grant Thornton UK Advisory & Tax LLP ("Grant Thornton"). The Statement is subject to uncertainty as described in this Announcement and our work did not involve an independent examination of any of the financial or other information underlying the Statement.
We have relied upon the accuracy and completeness of all the financial and other information provided to us by, or on behalf of, Unite, or otherwise discussed with or reviewed by us, and we have assumed such accuracy and completeness for the purposes of providing this letter.
We do not express any opinion as to the achievability of the quantified financial benefits identified by the Unite Directors.
We have also reviewed the work carried out by Grant Thornton and have discussed with them the opinion set out in Part B of Appendix 4 to this Announcement addressed to yourselves and ourselves on this matter.
This letter is provided to you solely in connection with Rule 28.1(a)(ii) of the Code and for no other purpose. We accept no responsibility to Unite or its shareholders or any person other than the Unite Directors in respect of the contents of this letter. We are acting as financial adviser to Unite and no one else in connection with the Acquisition and it was solely for the purpose of complying with Rule 28.1(a)(ii) of the Code that Unite requested us to prepare this report on the Statement. No person other than the Unite Directors can rely on the contents of this letter, and to the fullest extent permitted by law, we exclude all liability (whether in contract, tort or otherwise) to any other person, in respect of this letter, its results, or the work undertaken in connection with this letter, or any of the results that can be derived from this letter or any written or oral information provided in connection with this letter, and any such liability is expressly disclaimed except to the extent that such liability cannot be excluded by law.
On the basis of the foregoing, we consider that the Statement, for which you as the Unite Directors are solely responsible, has been prepared with due care and consideration.
Yours faithfully,
Lazard & Co., Limited
APPENDIX 5
VALUATION REPORTS FOR UNITE AND EMPIRIC
APPENDIX 6
UNITE 2025 PROFIT FORECAST AND EMPIRIC 2025 PROFIT FORECAST
PART A: UNITE 2025 PROFIT FORECAST
Unite released its 2024 financial results preliminary statement on 25 February 2025, which included the following statement: "guidance for adjusted EPS of 47.5 - 48.25p in 2025" ("Unite 2025 Profit Forecast").
The Panel on Takeovers and Mergers has confirmed that the Unite 2025 Profit Forecast constitutes a profit forecast made before the commencement of an offer period, to which the requirements of Rule 28.1(c)(i) of the Code apply.
Basis of preparation
The Unite 2025 Profit Forecast is based on the Group's interim accounts for the six-month period ended 30 June 2025 and the Group's current internal unaudited forecasts for the remainder of the financial year ending 31 December 2025.
The Unite 2025 Profit Forecast has been compiled on the basis of the assumptions set out below. The basis of the accounting policies used in the Unite 2025 Profit Forecast is consistent with the existing accounting policies of the Group, which uses 'Alternative Performance Measures' or other non-International Financial Reporting Standards measures.
Directors' confirmation
The Unite Directors have considered the Unite 2025 Profit Forecast and confirm that, as at the date of this Announcement, the Unite 2025 Profit Forecast remains valid, has been properly compiled on the basis of the assumptions set out below and the basis of accounting used is consistent with the Unite Group's existing accounting policies.
Assumptions
The Unite 2025 Profit Forecast has been prepared on the basis referred to above and subject to the principal assumptions set out below. The Unite 2025 Profit Forecast is inherently uncertain and there can be no guarantee that any of the assumptions listed below will occur and/or if they do, their effect on the Group's results of operations, financial condition or financial performance may be material. The Unite 2025 Profit Forecast should be read in this context and construed accordingly.
The Unite Directors have made the following assumptions in respect of the financial year ending 31 December 2025:
Assumptions within Unite's control or influence:
· no material change to the existing strategy or operation of the Group's business;
· no material adverse change to the Group's ability to meet customer, supplier and partner needs and expectations based on current practice;
· no material unplanned asset acquisitions or disposals, merger and acquisition activity conducted by or affecting the Group;
· no material change to the present management of the Unite Group; and
· no material change in capital allocation policies of the Group.
Assumptions outside of Unite's control or influence:
· no material effect from changes to existing prevailing macroeconomic, fiscal, monetary and inflationary conditions in the United Kingdom;
· no material adverse change to the Group's market environment, including in relation to customer demand or competitive environment;
· no material adverse events that have a significant impact on the Group's major partners or suppliers;
· no material disruption or changes to student demand for accommodation in the cities in which the Group operates;
· no material adverse events that would have a significant impact on the Group including information technology/cyber infrastructure disruption or significantly adverse weather events;
· no material new litigation, and no material unexpected developments in any existing litigation, each in relation to any of the Group's activities; and
· no material change in legislation, taxation or regulatory requirements impacting the Group's operations, expenditure or its accounting policies.
PART B: EMPIRIC 2025 PROFIT FORECAST
Empiric provides annual dividend targets in the ordinary course of business at the time of its preliminary results announcements.
In its preliminary results announcement released on 13 March 2025 the Empiric Board stated that:
"Despite the challenges faced this past year, we are delighted to be in a position to declare a dividend in excess of our initial 3.5 pence target for 2024. Today we have announced our final quarterly dividend for 2024 of 1.075 pence per share taking the total dividend paid and payable in respect of 2024 to 3.7 pence per share, an increase of six per cent on 2023. With the Board remaining committed to a progressive dividend policy, we will therefore initially target a minimum dividend of 3.7 pence per share for the 2025 financial year".
In addition, in its annual report for the financial year ended 31 December 2024, Empiric provided incremental disclosure as follows:
"The Board intends to continue to make quarterly payments to shareholders throughout 2025. It is the Board's intention that dividends remain fully covered by recurring earnings and are progressive in nature. The Board will initially target a minimum dividend of 3.7 pence per share for the financial year to 31 December 2025".
The Panel on Takeovers and Mergers has confirmed that the statements set out above (the "Empiric 2025 Profit Forecast"), taken together constitute a profit forecast made before the commencement of an offer period, to which the requirements of Rule 28.1(c)(i) of the Code apply.
Directors' confirmation in respect of the Empiric 2025 Profit Forecast
The Empiric Directors have considered the Empiric 2025 Profit Forecast and confirm that, as at the date of this Announcement, the Empiric 2025 Profit Forecast remains valid and confirm that it has been properly compiled on the basis of the assumptions stated below and that the basis of accounting used is consistent with Empiric's accounting policies. Any of the assumptions set out below could turn out to be incorrect and therefore affect the validity of the Empiric 2025 Profit Forecast.
Assumptions
The Empiric 2025 Profit Forecast was prepared on the basis of the following assumptions, any of which could turn out to be incorrect and therefore affect the validity of the Empiric 2025 Profit Forecast:
Factors outside the influence or control of the Empiric Directors:
· No material change in the political, economic and/or market environment that would materially affect Empiric.
· There will be no material changes in market conditions over the period to 31 December 2025 in relation to either tenant demand or competitive environment.
· No significant or one-off events or litigation that would have a material impact on the operating results or financial position of Empiric.
· There will be no material adverse change to Empiric Group's tenant relationships.
· No adverse changes to inflation or interest or tax rates compared with Empiric's budgeted estimates.
· No material adverse events which will have a significant impact on the operating results or financial position of Empiric.
· No material adverse outcome from any ongoing or future disputes with any tenants, competitor, regulator or tax authority.
· No material change in legislation, taxation, regulatory requirements, applicable standards or the position of any regulatory bodies impacting Empiric's operations or accounting policies.
Factors within the influence and control of the Empiric Directors:
· No additional significant acquisitions, disposals, developments, partnership or joint venture agreements being entered into by Empiric which could have a materially dilutive effect on Empiric's earnings.
· No material change in the dividend or capital policies.
· No material changes to the Empiric management team.
· No material changes to Empiric's strategy.
· Empiric's accounting policies will be consistently applied in the period ending 31 December 2025.
Appendix 7
DEFINITIONS
The following definitions apply throughout this Announcement unless the context requires otherwise:
|
"Acquisition" |
the proposed acquisition by Unite of the entire issued and to be issued share capital of Empiric to be implemented by means of the Scheme or, should Unite so elect, by means of a Takeover Offer |
|
"Announcement" |
this announcement of the Acquisition made in accordance with Rule 2.7 of the Code |
|
"Authorisations" |
authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, permissions and approvals |
|
"Blocking Law" |
any provision of Council Regulation (EC) No. 2271/1996 of 22 November 1996 (or any law implementing such Regulation in any member state of the European Union) or any similar blocking or anti-boycott law |
|
"Business Day" |
a day (other than a Saturday or Sunday) on which banks are open for general business in London |
|
"BTR" |
build-to-rent housing, meaning residential developments designed and built specifically for the purpose of renting, rather than for sale, and typically managed by professional landlords |
|
"Clean Team Agreement" |
the clean team agreement dated 6 June 2025 between Unite and Empiric as described in paragraph 16 of this Announcement |
|
"CMA" |
the UK's Competition and Markets Authority, or any successor authority |
|
"Code" |
the City Code on Takeovers and Mergers, as amended from time to time |
|
"Companies Act" |
the Companies Act 2006, as amended from time to time |
|
"Completion" |
the completion of the Acquisition |
|
"Commitment Letter" |
the commitment letter dated 14 August 2025 between Unite and Barclays Bank PLC in respect of the IFA as described in paragraph 17 of this Announcement |
|
"Conditions" |
the conditions to the implementation of the Acquisition (including the Scheme) which are set out in Appendix 1 to this Announcement and to be set out in the Scheme Document |
|
"Confidentiality Agreement" |
the confidentiality agreement dated 11 April 2025 between Empiric and Unite as described in paragraph 16 of this Announcement |
|
"Co-operation Agreement" |
the agreement dated on around the date hereof between Unite and Empiric relating to, among other things, the implementation of the Acquisition |
|
"Court" |
HM High Court of Justice in England and Wales |
|
"Court Meeting" |
the meeting of Scheme Shareholders to be convened by an order of the Court under section 896 the Companies Act, notice of which will be set out in the Scheme Document, to consider and if thought fit approve the Scheme (with or without amendment) including any adjournment, postponement or reconvening thereof |
|
"Court Order" |
the order of the Court sanctioning the Scheme under Part 26 of the Companies Act |
|
"Court Sanction Hearing" |
the hearing of the Court to sanction the Scheme under Part 26 of the Companies Act |
|
"Court Sanction Hearing Date" |
the date of the Court Sanction Hearing |
|
"CREST" |
the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755), in respect of which Euroclear UK & International Limited is the operator |
|
"Dealing Disclosure" |
an announcement pursuant to Rule 8 of the Code containing details of dealings in interests in relevant securities of a party to an offer |
|
"Disclosed" |
Information which has been fairly disclosed: (a) by, or on behalf of, Empiric in the Empiric Annual Report and Accounts for the year ended 31 December 2024;
(b) prior to the date of this Announcement by, or on behalf of, Empiric to Unite (or its respective officers, employees, agents or advisers in their capacity as such), including (without limitation) via the virtual data room operated on behalf of Empiric in respect of the Acquisition;
(c) in any public announcement made via a Regulatory Information Service by, or on behalf of, Empiric prior to the date of this Announcement (by delivery of an announcement to a Regulatory Information Service); or
(d) in this Announcement. |
|
"Disclosure Guidance and Transparency Rules" |
the Disclosure Guidance and Transparency Rules made by the FCA and forming part of the FCA's Handbook (as amended from time to time) |
|
"Effective" |
in the context of the Acquisition: (i) if the Acquisition is implemented by way of Scheme, means the Scheme having become effective pursuant to its terms; or (ii) if the Acquisition is implemented by way of a Takeover Offer, such offer having become or been declared unconditional in accordance with its terms |
|
"Effective Date" |
the date on which the Scheme becomes effective pursuant to its terms |
|
"Empiric" |
Empiric Student Property PLC of 1st Floor, 72 Borough High Street, London, SE1 1XF |
|
"Empiric 2025 Profit Forecast" |
has the meaning given to it in Part B of Appendix 6 of this Announcement |
|
"Empiric 2025 Dividends" |
has the meaning given to it in paragraph 2 of this Announcement |
|
"Empiric Annual Report and Accounts" |
the audited annual report and accounts for Empiric for the year ended 31 December 2024 |
|
"Empiric Directors" or "Empiric Board" |
the board of directors of Empiric and "Empiric Director" means any of them |
|
"Empiric Group" |
Empiric and its subsidiary undertakings |
|
"Empiric Permitted Dividends" |
has the meaning given to it in paragraph 12 of this Announcement |
|
"Empiric Shareholders" |
the holders of Empiric Shares |
|
"Empiric Shares" |
ordinary shares of one penny each in the capital of Empiric |
|
"Empiric Share Plans" |
the Empiric Student Property PLC 2014 Long Term Incentive Plan, the Empiric Student Property PLC 2024 Long Term Incentive Plan and the Empiric Student Property PLC SAYE Option Plan |
|
"Enlarged Group" |
the enlarged group following the Acquisition comprising the Unite Group and the Empiric Group |
|
"EPRA NTA" |
the net asset value of the relevant group including property interests valued at market value but excluding the mark to market value of financial instruments, deferred tax and intangible assets |
|
"FCA" |
the Financial Conduct Authority of the United Kingdom, acting in its capacity as the competent authority for the purposes of FSMA |
|
"FSMA" |
the Financial Services and Markets Act 2000, as amended from time to time |
|
"Forms of Proxy" |
the forms of proxy for use at the Court Meeting and the General Meeting respectively, which will accompany the Scheme Document |
|
"General Meeting" |
the general meeting of Empiric Shareholders to be convened in connection with the Acquisition, notice of which will be set out in the Scheme Document, to consider and if thought fit approve the Resolution, including any adjournment, postponement or reconvening thereof |
|
"Grant Thornton" |
Grant Thornton UK Advisory & Tax LLP |
|
"HMO" |
houses of multiple occupation |
|
"IFA" |
has the meaning given to it in paragraph 17 of this Announcement |
|
"Latest Practicable Date" |
means the Business Day prior to the publication of this Announcement |
|
"Last Accounts Date" |
31 December 2024 |
|
"Last Undisturbed Trading Date" |
4 June 2025, being the last day prior to the commencement of the Offer Period |
|
"Lazard" |
Lazard & Co., Limited of 20 Manchester Square, London W1U 3PZ |
|
"London Stock Exchange" |
London Stock Exchange plc |
|
"Long-Stop Date" |
11.59 pm on 30 June 2026 or such later date (if any) as may be agreed in writing by Unite and Empiric (with the consent of the Panel, if required) or as directed by the Panel, and in each case as the Court may approve (if such approval is required) |
|
"LTV" |
loan to value |
|
"Main Market" |
the market of the London Stock Exchange for listed securities |
|
"Market Abuse Regulation"
|
the UK version of the EU Market Abuse Regulation (2014/596/EU) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended from time to time |
|
"New Unite Shares" |
the new Unite Shares to be allotted pursuant to the Scheme |
|
"Offer Document" |
if (subject to the consent of the Panel and the terms of the Co-operation Agreement), Unite elects to effect the Acquisition by way of a Takeover Offer, the offer document published by or on behalf of Unite in connection with any Takeover Offer, setting out, among other things, the full terms and conditions of the Acquisition, including any revised offer document |
|
"Official List" |
the official list maintained by the FCA pursuant to Part 6 of FSMA |
|
"Opening Position Disclosure" |
an announcement pursuant to Rule 8 of the Code containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to an offer |
|
"Panel" or "Takeover Panel" |
the Panel on Takeovers and Mergers |
|
"PBSA" |
purpose-built student accommodation |
|
"Registrar of Companies" |
the Registrar of Companies in England and Wales |
|
"Regulatory Information Service" |
a primary information provider which has been approved by the FCA to disseminate regulated information |
|
"Reverse Confidentiality Agreement" |
the confidentiality agreement dated 2 June 2025 between Unite and Empiric as described in paragraph 16 of this Announcement |
|
"Resolution" |
the resolution to be proposed at the General Meeting necessary to facilitate the implementation of the Acquisition, including, without limitation, a resolution to amend the articles of association of Empiric |
|
"Restricted Jurisdiction" |
any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Acquisition is sent or made available to Empiric Shareholders in that jurisdiction |
|
"Scheme" or "Scheme of Arrangement" |
the scheme of arrangement proposed to be made under Part 26 of the Companies Act between Empiric and the Scheme Shareholders to be set out in the Scheme Document, with or subject to any modification, addition or condition approved or imposed by the Court |
|
"Scheme Document" |
the document to be sent to Empiric Shareholders setting out, amongst other things, the Scheme and notices convening the Court Meeting and the General Meeting |
|
"Scheme Effective Time" |
the time at which the Scheme becomes effective |
|
"Scheme Record Time" |
6.00 pm on the Business Day immediately preceding the Effective Date |
|
"Scheme Shareholders" |
holders of Scheme Shares and a "Scheme Shareholder" shall mean any one of those scheme shareholders |
|
"Scheme Shares" |
the Empiric Shares: (i) in issue at the date of the Scheme Document and which remain in issue at the Scheme Record Time; (ii) (if any) issued after the date of the Scheme Document but before the Voting Record Time and which remain in issue at the Scheme Record Time; and (iii) (if any) issued at or after the Voting Record Time but at or before the Scheme Record Time on terms that the holder thereof shall be bound by the Scheme or in respect of which the original or any subsequent holders thereof are, or have agreed in writing to be, bound by the Scheme and, in each case, which remain in issue at the Scheme Record Time, excluding, in any case, any Empiric Shares held by or on behalf of Unite or the Unite Group at the Scheme Record Time |
|
"subsidiary" and "subsidiary undertaking" |
have the meanings given to them in the Companies Act |
|
"Takeover Offer" |
should the Acquisition be implemented by way of a takeover offer as defined in section 974 of the Companies Act, the offer to be made by or on behalf of Unite to acquire the entire issued and to be issued share capital of Empiric and, where the context requires, any subsequent revision, variation, extension or renewal of such offer |
|
"Third Party" |
means any central bank, government, government department or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, authority (including any national or supranational anti-trust or merger control authority), court, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction, including, for the avoidance of doubt, the Panel |
|
"Total Transaction Value" |
has the meaning given to it in paragraph 2 of this Announcement |
|
"Treasury Shares" |
shares held as treasury shares as defined in section 724(5) of the Companies Act |
|
"UILs" |
has the meaning given to it in paragraph 13 of this Announcement |
|
"UK" or "United Kingdom" |
the United Kingdom of Great Britain and Northern Ireland |
|
"UK Listing Rules" |
the UK Listing Rules issued by the FCA pursuant to Part 6 of the Financial Services and Markets Act 2000, as amended from time to time |
|
"UK Prospectus Regulation" |
the UK version of the EU Prospectus Regulation (2017/1129/EU) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended from time to time |
|
"Unite" |
The Unite Group PLC of South Quay House Temple Back Bristol BS1 6FL |
|
"Unite Directors" or "Unite Board" |
the board of directors of Unite and "Unite Director" means any of them |
|
"Unite Final Dividend" |
has the meaning given to it in paragraph 12 of this Announcement |
|
"Unite Interim Dividend" |
has the meaning given to it in paragraph 12 of this Announcement |
|
"Unite Permitted Dividends" |
has the meaning given to it in paragraph 12 of this Announcement |
|
"Unite Shareholders" |
the holders of Unite Shares |
|
"Unite Shares" |
the ordinary shares of 25 pence each in the capital of Unite |
|
"United States" or "US" |
the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia, and all other areas subject to its jurisdiction |
|
"Unite Group" |
Unite and its subsidiary undertakings |
|
"Voting Record Time" |
the time and date as specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting will be determined |
All times referred to are London time unless otherwise stated.
All references to "GBP", "pence", "sterling" or "£" are to the lawful currency of the United Kingdom.
All references to statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom.
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