Unite to buy Liberty Living in £1.4bn cash and share deal

Student accommodation provider Unite has agreed to buy Liberty Living from the Canada Pension Plan Investment Board (CPPIB) in a £1.4bn cash and share deal.

The company, which confirmed last week that it was in talks over the deal, said the CPPIB will take a 20% stake in the enlarged group upon completion.

Unite also announced a placing of up to 26.35 million shares, which is a stake of about 9.9%, to help fund the acquisition. It said that around £240m of the net proceeds will be used to part fund the deal, while £310m will be drawn from its existing financing facilities and cash resources.

Chief executive officer Richard Smith said: "This is a transformative acquisition which brings together the best of two companies with a wealth of expertise and experience in delivering for students and university partners. By combining two highly complementary portfolios, the enlarged group will be well positioned to meet the growing need for affordable, high quality student accommodation in university towns and cities where demand is strong.

"This, combined with our best-in-class operating platform, will mean more choice for universities and an enhanced service and welfare offer for students.

"Backed by a conservative capital structure, this acquisition accelerates and extends our earnings growth and provides opportunities to further enhance total shareholder returns."

The CPPIB is the sole shareholder of Liberty Living, which offers student accommodation in 21 cities across the UK and Europe.