Response to Media Speculation
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
THE UNITE GROUP PLC
("Unite", the "Group", or the "Company")
RESPONSE TO MEDIA SPECULATION
The Board of Unite (the "Board") notes the recent media speculation regarding the potential acquisition of Liberty Living Group plc ("Liberty Living") by Unite and confirms that discussions with the Canada Pension Plan Investment Board ("CPPIB"), Liberty Living's sole shareholder, regarding a potential transaction are at an advanced stage.
If the transaction goes ahead it will be priced on a NAV-for-NAV basis. As at 28 February 2019, Liberty Living's NAV was £1.4 billion. The transaction consideration will be a combination of cash and shares such that CPPIB would become a significant shareholder in the enlarged group upon completion. It is expected that part of the cash consideration will be funded through an equity placing representing no more than 10% of Unite's current issued share capital and the Group will maintain its existing leverage targets.
The Board believes that the proposed transaction represents a transformative acquisition which will:
· Leverage Unite's scalable and best-in-class operating platform (PRISM) to deliver significant synergies;
· Sustain Unite's medium term rental growth outlook; and
· Deliver material earnings accretion and enhance Unite's earnings yield.
Given the size of the potential combination, the transaction would be a Class 1 transaction for Unite pursuant to the UK Listing Rules and would therefore be subject to a shareholder vote.
There can be no certainty that any transaction will be agreed and a further announcement will be made if and when appropriate.
For further information, please contact:
The Unite Group
Richard Smith, Chief Executive Officer
Joe Lister, Chief Financial Officer
+44 (0) 117 302 7005
J.P. Morgan Cazenove (Joint Financial Adviser and Joint Broker)
+44 (0) 20 7742 4000
Numis (Joint Financial Adviser and Joint Broker)
+44 (0) 20 7260 1000
Powerscourt (PR adviser to Unite)
+44 (0)20 7250 1446
The information contained within this announcement is considered by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.
The person responsible for arranging for the release of this announcement on behalf of the Company is Chris Szpojnarowicz, Company Secretary.
About Unite Students
Unite Students is the UK's largest manager and developer of purpose-built student accommodation serving the country's world-leading higher education sector. We currently provide homes for almost 50,000 students in circa 130 properties across 22 leading university towns and cities in England and Scotland. Unite also has a strong development pipeline, which will deliver more than 6,000 beds in the next three years.
Our 1,400 people are driven by a common purpose: to provide the students who live with us a 'Home for Success' and to be the most trusted brand in the sector. We do this through quality service, quality people and quality properties, all designed on the basis of an unrivalled insight into students' needs and preferences.
Unite's accommodation is high quality, safe and secure, and located close to university campuses, transport links and local amenities. Students live predominantly in en-suite study bedrooms with rents covering all bills, insurance, 24-hour security, fortnightly cleaning services and high-speed Wi-Fi. MyUnite, our mobile app, provides practical support such as instant messaging and maintenance requests.
Our commitment to customer service is powered by an innovative, in-house operating platform. It provides a wide range of benefits to our students, such as an optimised online booking process, as well as providing us with a unique ability to drive value from our portfolio through scale efficiencies and revenue management.
Alongside delivering quality service, our other strategic priority is delivering growing and sustainable earnings, underpinned by a strong capital structure. A key part of this strategy is growing the number of beds let though partnerships with mid and high tariff universities which are experiencing record levels of student demand. We currently partner with 60 higher education institutions, guaranteeing that approximately 60% of our rooms are let under multi-year, 'nomination agreements' providing high visibility of forward occupancy and rental growth.
Unite is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £2 billion Unite UK Student Accommodation Fund (USAF), and the £1 billion London Student Accommodation Vehicle (LSAV).
Unite is the founder of and major donor to the Unite Foundation, a charitable trust established to support talented students facing challenging financial circumstances through the provision of free accommodation annual scholarships. The Foundation has so far provided scholarships for 209 young people working in close collaboration with 27 universities.
Founded in 1991 in Bristol, Unite Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index.
The distribution of this announcement and any proposed offering, placing and/or issue of the securities referred to herein in certain jurisdictions may be restricted by law. No action has been taken by the Company, J.P. Morgan Securities plc or Numis Securities Limited (the "Banks") or any of their respective affiliates that would permit an offer of securities or possession or distribution of this announcement or any other offering or publicity material relating to securities in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and the Banks to inform themselves about and to observe any such restrictions.
This announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire securities in any jurisdiction in which any such offer or solicitation would be unlawful. Any failure to comply with this restriction may constitute a violation of the securities laws of such jurisdictions.
This announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia) (the "United States" or "US"), Canada, Australia, South Africa, Japan or any other jurisdiction in which the same would be unlawful. No public offering of securities is being made in any such jurisdiction.
The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States, and accordingly may not be offered, sold, pledged or transferred, directly or indirectly, in, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any relevant state or jurisdiction of the United States. There is no intention to register any portion of any offering in the United States or to conduct a public offering of securities in the United States.
This announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are or may be beyond the control of Unite and/or Liberty Living and which could cause actual results of trends to differ materially, including, but not limited to, domestic and global economic business conditions; market-related risks such as fluctuations in interest rates; the policies and actions of governmental and regulatory authorities; the effect of competition, inflation and deflation; the effect of legislative, fiscal, tax and regulatory developments in the jurisdictions in which Unite and Liberty Living and its respective affiliates operate; the effect of volatility in the equity, capital and credit markets on profitability and ability to access capital and credit; a decline in credit ratings of Unite and/or Liberty Living; the effect of operational risks; an unexpected decline in turnover, rental income or the value of all or part of Unite's or Liberty Living's property portfolio; any limitations of internal financial reporting controls; and the loss of key personnel. Any forward-looking statements made in this announcement by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
No statement in this announcement is intended to be a profit forecast, and no statement in this announcement should be interpreted to mean that earnings or earnings per share of Unite or Liberty Living for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share of Unite or Liberty Living.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Banks or by any of their respective affiliates or their or their respective affiliates' agents, directors, officers and employees, respectively, as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.
This announcement does not constitute a recommendation concerning any investor's options with respect to any proposed placing. The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each investor or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.
J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove, and which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority (the "FCA") and the Prudential Regulation Authority, is acting for the Company in connection with the subject matter of this announcement and no-one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of J.P. Morgan Securities plc nor for providing advice in relation to any matter referred to in this announcement.
Numis Securities Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company in connection with the subject matter of this announcement and no-one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis Securities Limited nor for providing advice in relation to any matter referred to in this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
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