Rathbones' Empiric Trades Reveal Takeover Endgame Strategy

LONDON, UK – November 28, 2025

A routine regulatory filing has pulled back the curtain on the high-stakes maneuvering that accompanies a major corporate takeover. On Friday, investment management giant Rathbones Group Plc disclosed it had trimmed its significant holding in Empiric Student Property Plc, the student housing operator currently in the final stages of being acquired by rival The Unite Group PLC. The filing, a mandatory Form 8.3 disclosure under the UK’s Takeover Code, provides a textbook example of how institutional investors navigate the complex landscape of mergers and acquisitions, and underscores the critical role of transparency in maintaining market integrity.

The disclosure reveals that Rathbones, while still commanding a substantial 3.04% stake in Empiric, sold off a series of share blocks on November 27. These sales, totaling approximately 179,716 shares at prices between 74.49p and 75.81p, occurred on the very day the UK’s Competition & Markets Authority (CMA) gave its unconditional blessing to the takeover. This timing is no coincidence; it is a calculated move in the final act of a months-long acquisition saga, offering a rare public glimpse into the playbook of a major institutional investor.

Decoding the Disclosure: A Lesson in Market Transparency

For many market observers, a Form 8.3 filing is simply procedural noise. However, for those tracking M&A activity, it is a vital signal. The Takeover Code mandates that any person or entity holding an interest of 1% or more in a company subject to a takeover bid must publicly disclose their position and any subsequent dealings. This rule is the bedrock of a fair and orderly market during the sensitive period of a corporate merger, designed to prevent insider dealings and ensure all shareholders have access to the same critical information.

Rathbones' filing is a case in point. By revealing its 20.25 million share position and the recent sales, the firm provides crucial data to the market. It shows that a significant, sophisticated investor is actively managing its exposure as the deal approaches its conclusion. The filing also notes that Rathbones is making disclosures "in respect of any other party to the offer," a common occurrence in deals involving a share-exchange component. The Unite Group's offer for Empiric consists of both cash and new Unite shares, meaning investors and connected parties often have holdings in both the acquirer and the target, necessitating dual disclosures to provide a complete picture of their interests.

These regulations force the actions of major players out of the shadows and into the public domain. They allow other investors—from large funds to individual retail shareholders—to understand who is buying, who is selling, and at what price, helping them make more informed decisions about their own holdings as the transaction's effective date looms.

A Sector in Consolidation: The Unite-Empiric Megadeal

The context for Rathbones' trading activity is the landmark consolidation within the UK's purpose-built student accommodation (PBSA) sector. The acquisition of Empiric Student Property by its larger competitor, The Unite Group, is set to create a dominant force in the market. The deal, first proposed in May 2025 and formally agreed upon in August, values Empiric at approximately £634 million, or £723 million including dividends.

Under the agreed terms, Empiric shareholders will receive 0.085 new Unite shares and 32 pence in cash for each share they hold. This structure, a mix of cash and equity, allows Empiric investors to cash out a portion of their investment while also participating in the future of the larger, combined entity. Following the deal's completion, expected in late January 2026, existing Empiric shareholders will own around 10% of the new, enlarged Unite Group.

The strategic rationale for the merger is clear: combining two of the UK's leading student housing providers creates significant economies of scale, operational efficiencies, and an unparalleled portfolio of properties across key university cities. The deal has already passed its major hurdles, securing overwhelming approval from Empiric shareholders in October and, critically, receiving unconditional clearance from the CMA on November 27. This final regulatory green light removed the last significant obstacle, moving the deal from probable to near-certain.

The Institutional Playbook in Action

Against this backdrop of impending finality, Rathbones' decision to sell a fraction of its holding is a classic institutional strategy. While the firm retains a significant stake, indicating a continued belief in the value of the transaction and the combined entity, the sales reflect prudent portfolio management. Several factors likely informed this decision.

First is straightforward profit-taking. Takeover bids almost always include a premium to the target company's pre-offer share price. The Unite offer valued Empiric shares at 94.2 pence at the time of the August announcement, a significant uplift. For an early investor, selling shares as the deal nears certainty is a way to lock in those gains.

Second is risk management. Although the CMA has cleared the deal, a sliver of execution risk always remains until the transaction is legally complete. Trimming a position reduces exposure to any unforeseen, last-minute complications. The sales on November 27, which saw Empiric's shares dip slightly to the mid-70p range despite the positive CMA news, may reflect a broader "sell the news" sentiment as arbitrageurs and other investors who had bet on the deal's approval closed out their positions. Rathbones' trades align perfectly with this market dynamic.

Finally, the move can be seen as portfolio rebalancing. Rathbones manages vast sums for its clients, and the impending conversion of Empiric shares into a mix of cash and Unite shares will change the composition of its portfolio. Selling a small portion ahead of time allows for a more controlled adjustment of its holding in the student property sector and frees up capital that can be deployed into other opportunities. It is a subtle but disciplined move, demonstrating the active management that clients expect from a premier investment house. This is not a vote of no-confidence in the deal, but rather a tactical adjustment within a successful investment.

The transparency mandated by the Takeover Code allows the entire market to witness this sophisticated financial ballet. While the headlines focus on the multi-million-pound merger, these smaller, incremental disclosures tell a deeper story about strategy, risk, and the mechanics of modern finance. As the Unite-Empiric deal heads towards its January 2026 conclusion, the market will continue to watch the Form 8.3 filings for further clues into how the City’s biggest players are positioning themselves for the creation of a new student property titan.