News

GCP Student Living agrees £970m takeover

News

Tim Burke

16 July 2021

Investment/finance

GCP Student Living has agreed the terms of a £970m takeover and break-up by Scape Living and iQ.

The offer of 213p per share is priced at a 9.3% premium to net tangible assets and a 30.7% premium to GCP’s 1 July share price, valuing the entire company at £969m.

Scape Living and iQ – backed respectively by APG Asset Management and Blackstone – approached GCP about a deal earlier this month. APG owns an 11.1% stake in GCP already.

The bidders will break up the GCP portfolio if the deal completes. Scape Living will take the company’s assets in Wembley, Shoreditch, Brighton’s Circus Street, Bloomsbury and Guildford, equal to roughly 60% of the portfolio. iQ will take on close to 40% through sites in London’s Mile End, Brighton, Greenwich, The Pad and Podium in Egham and Bristol’s Water Lane Apartments.

GCP’s board has recommended the deal to shareholders. It said the Covid-19 vaccine rollout and investment appetite for student accommodation are both positive for its business, but that travel limitations due to the pandemic and the effect of Brexit on international students means “there remains considerable uncertainty on occupancy levels for at least one further academic year and possibly beyond”.

“At a time when investment market demand for assets of this type is at an unprecedented level, despite ongoing uncertainty created by the pandemic and Brexit on international student movements, this transaction enables our shareholders to realise full value for their investment at a price which exceeds GCP’s previous all-time high share price,” said GCP chairman David Hunter.

Scape Living’s Leo Hertog said: “We have strong ambitions for the growth of our Scape Living platform and this transaction represents an important milestone with the acquisition of five high-quality student housing assets across London and the South East in markets with strong long-term fundamentals.”

Matt Merrick of iQ added: “iQ is deeply committed to providing students with a high-quality living experience and this transaction will enable us to bring our offer to more students across London and the South East.”

Jefferies is advising GCP, while Citi and Lazard and Citi are advising the bidders.

GCP Student Living has agreed the terms of a £970m takeover and break-up by Scape Living and iQ. The offer of 213p per share is priced at a 9.3% premium to net tangible assets and a 30.7% premium to GCP’s 1 July share price, valuing the entire company at £969m. Scape Living and iQ – backed respectively by APG Asset Management and Blackstone – approached GCP about a deal earlier this month. APG owns an 11.1% stake in GCP already. The bidders will break up the GCP portfolio if the deal completes. Scape Living will take the company’s assets in Wembley, Shoreditch, Brighton’s Circus Street, Bloomsbury and Guildford, equal to roughly 60% of the portfolio. iQ will take on close to 40% through sites in London’s Mile End, Brighton, Greenwich, The Pad and Podium in Egham and Bristol’s Water Lane Apartments. GCP’s board has recommended the deal to shareholders. It said the Covid-19 vaccine rollout and investment appetite for student accommodation are both positive for its business, but that travel limitations due to the pandemic and the effect of Brexit on international students means “there remains considerable uncertainty on occupancy levels for at least one further academic year and possibly beyond”. “At a time when investment market demand for assets of this type is at an unprecedented level, despite ongoing uncertainty created by the pandemic and Brexit on international student movements, this transaction enables our shareholders to realise full value for their investment at a price which exceeds GCP’s previous all-time high share price,” said GCP chairman David Hunter. Scape Living’s Leo Hertog said: “We have strong ambitions for the growth of our Scape Living platform and this transaction represents an important milestone with the acquisition of five high-quality student housing assets across London and the South East in markets with strong long-term fundamentals.” Matt Merrick of iQ added: “iQ is deeply committed to providing students with a high-quality living experience and this transaction will enable us to bring our offer to more students across London and the South East.” Jefferies is advising GCP, while Citi and Lazard and Citi are advising the bidders.