Hedge Fund's Hand Revealed in UK Student Property Takeover

LONDON, UK – November 24, 2025

A mandatory public disclosure has pulled back the curtain on the high-stakes financial maneuvering surrounding the acquisition of Empiric Student Property plc, revealing that prominent global hedge fund Balyasny Asset Management is actively trading its significant position in the company. The filing, a Form 8.3 required under the UK's stringent Takeover Code, details Balyasny's derivative-based stake and recent dealings, providing a rare window into how sophisticated investors navigate the complex landscape of a major corporate merger.

The disclosure comes as The Unite Group PLC's £723 million bid to acquire Empiric moves through its final regulatory stages, a deal set to create a dominant force in the UK's purpose-built student accommodation (PBSA) market. Balyasny's tactical adjustments, while not directly influencing shareholder votes, offer a crucial signal to the market about sentiment and strategy as the landmark consolidation nears completion.

Anatomy of a Sector-Defining Deal

The proposed merger between Unite and Empiric represents a pivotal moment for the UK student housing sector. The recommended cash-and-share offer, first announced on August 14, 2025, will see Empiric shareholders receive 0.085 new Unite shares plus 32 pence in cash for each share they hold. At the time of the announcement, the deal valued Empiric's equity at approximately £634 million, with a total value of £723 million when including dividends.

This acquisition is structured as a Scheme of Arrangement, a court-supervised process that has already secured critical backing. On October 6, 2025, Empiric's shareholders gave their overwhelming approval, with over 70% of votes cast at a court meeting and more than 86% at a general meeting supporting the transaction. The deal cleared another significant hurdle on November 27, when the UK's Competition & Markets Authority (CMA) granted unconditional clearance after a Phase 1 investigation, assuaging fears of any significant anti-competitive impact.

Despite these milestones, the acquisition is not yet finalized. It remains contingent upon a final sanction from the court, with a hearing anticipated in the first half of 2026. Upon successful completion, the merger will create a student accommodation behemoth with a combined portfolio valued at around £10.5 billion, comprising approximately 75,000 beds. The strategic rationale is clear: combining Unite's vast scale with Empiric's complementary, high-quality portfolio, which is concentrated in prime locations across the UK's top-tier Russell Group university cities.

Decoding the Hedge Fund's Playbook

Against this backdrop of corporate consolidation, Balyasny's Form 8.3 disclosure provides a fascinating subplot. The filing reveals the hedge fund holds an interest equivalent to 8,188,202 shares in Empiric, representing 1.23% of the company. Critically, this entire position is held not through direct share ownership, but via cash-settled derivatives known as Contracts for Difference (CFDs).

CFDs are financial instruments that allow an investor to speculate on the future price movement of an asset without owning it. By taking a "long" CFD position, Balyasny was betting on Empiric's share price to rise. This strategy gives the fund economic exposure to the takeover's success but grants it no voting rights in the shareholder meetings that approved the deal. The use of derivatives is a common tactic for hedge funds in M&A situations, allowing for leveraged exposure and rapid trading without the administrative burden of handling physical shares.

The most revealing detail in the filing is Balyasny's recent activity. On November 21, the fund executed several transactions to reduce its long position, selling off CFD exposure at a price of £0.76 per unit. This move to trim its stake could be interpreted in several ways. It may be a straightforward case of profit-taking, as much of the deal's uncertainty has been removed following shareholder and CMA approval. Alternatively, it could be a reaction to the performance of Unite's stock. Since the deal includes a share component, a decline in Unite's share price—which recently hit a decade low—directly reduces the total value of the offer for Empiric's shareholders, potentially prompting a strategic recalibration by investors like Balyasny.

A Sector in Flux

The Unite-Empiric tie-up is happening at a time of dynamic change in the student property market. On one hand, demand for high-quality student housing in the UK remains robust, making the sector a relative bright spot for property investors. Empiric, with its premium "Hello Student" brand and focus on postgraduate and returning students, has carved out a valuable niche that complements Unite's broader, more scaled offering. The combined entity aims to leverage these strengths, creating a portfolio where 92% of beds are located in cities with elite Russell Group universities.

However, the market is not without its challenges. Broader economic headwinds and interest rate pressures have impacted the real estate sector, and Unite Group's own share price has been under significant pressure, falling to a 52-week low on November 24 despite the strategic progress of its acquisition. This divergence between the strong underlying demand for student beds and the shaky performance of a market leader's stock highlights the complex financial currents at play. Investor activity, therefore, is being watched with extreme care for signals about the sector's future health and the perceived value of this massive consolidation.

Transparency in the Takeover Arena

Balyasny's disclosure is not a voluntary act of transparency but a requirement of the UK Takeover Code's Rule 8.3. This regulation is a cornerstone of the UK's M&A framework, designed to ensure fairness and prevent the covert accumulation of influence during a bid period. It compels any entity with an interest of 1% or more in either the bidding or target company to publicly declare their position and any subsequent dealings.

By extending this rule to cover derivatives like CFDs, the Takeover Panel ensures that the market has a clear view of not just direct share ownership but also significant economic interests. This prevents sophisticated investors from building up substantial, hidden positions that could sway market prices or sentiment. For other investors and market analysts, these filings are invaluable. They confirm the presence of major institutional players and provide concrete data on how they are adjusting their positions in real time as a deal evolves.

As the Unite-Empiric acquisition moves toward its final court hearing, the market is no longer just watching the formal announcements from the companies involved. Thanks to the UK's robust disclosure regime, all eyes are also on the subtle but significant moves of financial heavyweights like Balyasny, whose trading patterns tell a story of risk, reward, and strategy in one of the year's most significant real estate transactions.