Unite Group agrees $1.8 billion deal with CPPIB's Liberty Living

LONDON (Reuters) - Student housing provider Unite UTG.L is to acquire rival Liberty Living Group in a 1.4 billion pounds ($1.76 billion) cash and shares deal that will see Canada's Pension Plan Investment Board take a 20 percent stake in the enlarged group.

Unite also proposed a placing of 26,353,664 new ordinary shares on Wednesday to help finance the acquisition.

Approximately 240 million pounds of the net proceeds of placing will be used to part fund the cash consideration of the deal, while a further 310 million pounds will be drawn from Unite’s existing financing facilities and cash resources.

Liberty Living’s properties in Cardiff will be sold to the Unite Student Accommodation Fund for 253 million pounds as part of the transaction.

The Liberty Living portfolio comprises 24,021 beds and was independently valued at 2.2 billion pounds as at May 31.

“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,” Unite’s CEO Richard Smith said.

Reporting By Sinead Cruise, editing by Lawrence White