This week, I’m looking at an acquisition with real upside potential for event-driven investors — but, as always, not without risk. The focus is the proposed takeover of Empiric Student Property by Unite Students.
Before diving into the regulatory angle and the companies themselves, it’s important to clarify that this is pure merger arbitrage. In other words: the strategy is to buy the target (Empiric) and hold only until the deal completes, then exit at the fixed acquisition price already agreed between the parties.
Because the intention is not to hold the stock long term, the fundamental business analysis matters less than usual. What matters is the regulatory outcome — specifically whether the CMA allows the deal to proceed in Phase I (with or without remedies). That decision is what will determine whether we capture that 8% or not.
Company Analysis
Unite Students (UTG)
Unite is the largest provider of purpose-built student accommodation (PBSA) in the UK, with over 68 000 beds across 23 cities, heavily concentrated in Russell Group university markets. Its model is industrial scale + institutional partnerships — more than 60 UK universities have nomination agreements with Unite, ensuring high occupancy visibility and reducing marketing costs.
The company targets mid-priced student housing, positioned between luxury operators (Vita, Collegiate) and low-cost HMOs. Unite’s competitive advantage lies in scale economics, recurring contracted income, and capex discipline, with strong focus on refurbishment-driven yield uplift. It operates as a quasi-infrastructure asset — stable, defensive, cashflow-rich — with highly consistent returns and strong access to capital markets.
Empiric Student Property (ESP)
Empiric is a premium student housing operator focused on high-quality boutique studios, targeting postgraduates and international students in prime city-centre locations in the UK. It owns around 7 600 beds across 23 cities and it concentrates on small clusters (typically 100–150 beds per building) near elite universities, especially in Bristol, Manchester, Glasgow, and Edinburgh.
Empiric’s strategy is yield optimisation, not scale. It focuses on refurbishment, design, and rental uplift, not volume. Its properties are normally higher priced than Unite’s, and attract students willing to pay for independence, privacy and higher living standards. As a listed REIT, Empiric’s equity story is based on high gross margins (≈70%), premium rent growth, and targeted urban clustering rather than national dominance.
Regulatory Event
What’s the deal?
Unite Students, announced in August 2025 its plan to acquire Empiric Student Property in a cash-and-shares transaction valuing the target at approximately £1 billion.
Each Empiric shareholder will receive £0.32 in cash, 0.085 Unite shares, and the remainder of the 2025 dividend (≈ £0.037) — an implied total of £0.856 per share based on Unite’s £5.87 closing price. With Empiric trading around £0.79, the market is pricing a spread of roughly 8 per cent.
In theory, the price offered in any acquisition includes a premium, otherwise the target’s shareholders would simply reject it. In this case, Empiric shareholders are being paid through a mix of cash and shares in Unite — and that offer currently implies a return of roughly 8%.
However, that 8% is not fixed. Empiric shareholders will receive 0.085 Unite shares, and Unite’s share price continues to fluctuate. At the time of writing, Unite trades below the level it had when the deal was agreed, which opens up several possible outcomes:
- Unite rebounds after closing → we receive the same number of shares, but at a higher price → potential upside could become +10% or even +20%.
- Unite falls further → we still receive the shares, but they’re worth less → the spread might shrink to +5%… or even +3%.
- The deal is blocked by the regulator → no spread is realised, and we simply remain holding Empiric shares.
Which brings us to the critical point of this transaction — what the CMA decides in Phase I.
Antitrust Review
I will provide more details on the regulatory analysis that you may want to read, but you can skip to the last paragraph if you prefer to go straight to the conclusion. Still, it is important that you understand the challenges here.
This acquisition brings together two operators with local overlaps in several key university cities. The CMA will need to assess whether these overlaps are problematic — essentially, whether there are enough other competitors in those areas for the deal not to harm competition. Given how granular the CMA’s assessment can be, there will be cities identified as potentially problematic.
Another interesting point is that both parties have agreed to abandon the deal entirely if they fail to secure Phase I clearance . That is unusual, as most parties are willing to proceed into Phase II to negotiate solutions with the regulator. While they legally could still choose to continue into Phase II, the contract makes their intention clear: this is meant to be a Phase I-or-abandon transaction.
The companies overlap in roughly 23 cities, most of which are unlikely to raise any competition concerns. However, there are three markets where the local overlaps could prove problematic:
- Bristol – Unite’s headquarters and flagship market, where Empiric owns assets around Clifton Triangle and College Green within the University of Bristol catchment.
- Glasgow – Empiric’s West End “hub” (Willowbank Hub, Claremont House) sits in the same 20-minute ring as Unite’s Gilmorehill properties near the University of Glasgow.
- Manchester – Empiric’s Victoria Point and Tatton House are adjacent to Unite’s Oxford Road cluster and carry planning consent for an additional 310 beds, creating a forward-looking overlap.
Other shared cities — Leeds, Edinburgh, Cardiff, Portsmouth, Southampton, Leicester, Nottingham — are less likely to raise flags.
The CMA’s precedents are very consistent over time, so we know more or less what we can expect.
Applying the same analysis as the CMA did before, the authority is likely to find material overlaps in Bristol, Glasgow, and Manchester, possibly requesting remedies (divestiture of assets) rather than referring the deal to a full Phase II review.
The CMA has historically been very pragmatic in this sector, accepting targeted divestitures where competition can be restored by selling one or two local assets.
- Bristol poses the most symbolic difficulty because Unite’s identity and university partnerships are anchored there; however, Empiric’s smaller cluster could be divested without disrupting the national strategy.
- Glasgow is operationally significant for Empiric — it is one of the cities where the company showcases its high-yield refurbishment strategy — which makes any remedy more costly for the target than for the buyer. However, precedent suggests that the parties’ combined share may remain modest relative to other operators, who could still exert sufficient competitive pressure. If that is confirmed by the CMA’s analysis, divestments in Glasgow may ultimately not be required.
- Manchester offers several divestment options, including Empiric’s consented pipeline, which could be sold pre-completion.
What’s the status?
The CMA formally opened its Phase I inquiry on 23 October 2025.
Both Unite and Empiric have indicated that they are prepared to offer targeted remedies if required, and it is likely that remedies will be discussed early in the review rather than left to the end of the statutory timetable.
Interestingly, one investment analyst report quoted Empiric as suggesting that only six cities were likely to be closely scrutinised by the CMA, and that divestitures might be needed in some of them — although the company subsequently distanced itself from that statement.
What’s the timeline?
- 16 September 2025 – CMA opens Phase I review.
- 19 December 2025 – Phase I statutory deadline.
- If the CMA finds no substantial competition concerns, the deal is approved.
- If overlaps persist but appear remediable, parties will have five working days to offer remedies which could push final clearance into January 2026.
- A Phase II referral would delay completion by at least four months.
Given the local-market nature of the analysis, and the legal precedents, in our view the CMA is expected to reach a pragmatic solution within the initial review period.
Unless new evidence suggests wider market effects — for instance, dominance in nomination contracts or pricing coordination across cities — the case is likely to close (approve) at Phase I with limited asset disposals.
