UNITE Convertible Bond Offering – 03 October 2013

NOT FOR DISTRIBUTION IN OR TO THE U.S., CANADA, AUSTRALIA,

JAPAN, SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH

SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

The UNITE Group plc (the “Group”, the “Company” or “UNITE”) today announces the launch of an offering (the “Offering”) of c. £90m of Convertible Bonds due 2018 (the “Bonds”).

The Offering will provide debt finance to fund the Group’s regional development programme and also forms part of its wider financial strategy to diversify sources of capital and extend its debt maturity profile. In the near term the proceeds will be used to replace short term debt maturities resulting in incremental interest savings. Following completion of the transaction and taking into account the proceeds from the Group’s share placing in June 2013, the Group will have raised all the capital required for its planned regional development programme. In addition, 41% of the Group’s balance sheet debt will be unsecured.

As stated in the Group’s results for the half year to 30 June 2013, UNITE’s operational performance remains strong. Reservations to date stand at 98% for the 2013/14 academic year, well ahead of 2012/13 levels and the Company is also making good progress with its development programme. It has exchanged contracts on a site in Wembley which will be developed by the Group’s LSAV joint venture and has also agreed exclusive positions on two regional sites that are formally under offer and which, if secured, will account for approximately 50% of the Group’s planned regional development programme. The Company will update the market on these sites in due course.

The Bonds will be issued by Unite Jersey Issuer Limited (the “Issuer”), a wholly-owned subsidiary of the Company incorporated in Jersey, and will be guaranteed by the Company. The Bonds will be senior and unsecured obligations of the Company and will be subject to a negative pledge.

The Bonds will be issued at par and are expected to carry a coupon of between 2.5% and 3.0% per annum payable semi-annually in arrear and will, subject to certain conditions, be convertible into fully paid ordinary shares of the Company (the “Shares”). The initial conversion price is expected to be set at a premium of between 30% and 35% above the volume weighted average price of the Shares from launch to pricing on 3 October 2013. The conversion price will be subject to adjustment pursuant to the terms and conditions of the Bonds. Settlement is expected to take place on or about 10 October 2013 (the “Settlement Date”).

The Issuer will have the option to call all outstanding Bonds at par plus accrued interest (i) on or after 25 October 2016 if the value of the underlying Shares per Bond equals or exceeds 130% of the principal amount of the Bond for at least 20 out of 30 consecutive dealing days or (ii) at any time, if 15% or less of the principal amount of the Bonds originally issued remains outstanding. If not previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed at par on 10 October 2018.

It is intended that an application will be made for the Bonds to be listed on a recognised stock exchange (as such term is defined in section 1005 of the Income Tax Act 2007) and admitted to trading prior to the first interest payment date (expected to be 10 April 2014).

J.P. Morgan Securities plc and The Royal Bank of Scotland plc are acting as Joint Bookrunners in relation to the Offering. Rothschild is acting as financial adviser to UNITE in relation to the Offering.

For further information, please contact:

The UNITE Group plc

Tel: 0117 302 7045

Mark Allan, Chief Executive Officer

Joe Lister, Chief Financial Officer

Bell Pottinger

Tel: 020 7861 3925

Victoria Geoghegan

Nick Lambert

Elizabeth Snow

About The UNITE Group Plc

The UNITE Group plc is the UK’s leading developer and manager of student accommodation, with a business model that focuses on two core areas: 

1.       Development and Asset Management: The UNITE Group plc undertakes the acquisition, planning and development of purpose-built student accommodation in the UK. Through the continuous assessment of quality and location of its investment portfolio, The UNITE Group plc is well positioned to deliver value-adding strategies to those assets where further opportunities are identified. Working on behalf of its partners, The UNITE Group plc acts as Fund Manager for the UNITE UK Student Accommodation Fund in which it owns a 16.3% share. The UNITE Group plc also manages a number of Joint Venture partnerships. 

2.       Professional property management: The UNITE Group provides accommodation for 42,000 students in over 120 properties across 23 of the UK’s strongest university cities, and has consistently proven high occupancy levels across its portfolio. 

The UNITE Group plc works closely with higher education institutions in order to deliver high quality, well-located student accommodation at affordable prices in strong higher education markets. In May 2013 The UNITE Group plc was awarded Student Accommodation Provider of the Year at Property Week’s RESI Awards. The UNITE Group plc has also been recognised by the Global Real Estate Sustainability Benchmark (GRESB) as a regional sector leader for sustainability. 

Founded in 1991, The UNITE Group plc is a FTSE 250 company listed on the London Stock Exchange (UTG). For more information, please visit www.unitegroup.com  or www.unite-students.com 

DISCLAIMER

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The information in this announcement is subject to change.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes, should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for or otherwise buy any securities to any person in the United States, Australia, Canada, Japan, South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to in this announcement have not been and will not be registered in the United States under the US Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United States unless registered under the Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, South Africa, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, South Africa, Canada or Japan. There will be no public offer of the securities in the United States, Australia, Canada, Japan or South Africa.

This communication is directed only at persons (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and qualified investors falling within Article 49(2)(a) to (d) of the Order, and (ii) to whom it may otherwise lawfully be communicated under the Order (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.

Each of the Joint Bookrunners, each of which is authorised and regulated by the Financial Conduct Authority and also regulated by the Prudential Regulation Authority, is acting exclusively for the Company and no one else in connection with the Offering and will not be responsible to any other person for providing the protections afforded to clients of such Joint Bookrunner respectively or for providing advice in relation to the Offering, the Bonds or any other transaction, matter or arrangement referred to in this announcement.

N M Rothschild & Sons Limited (“Rothschild”), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for the Company and no one else in relation to the Offering, the Bonds or any other transaction, matter or arrangement referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Rothschild nor for providing advice in relation to the Offering, the Bonds or any other transaction, matter or arrangement referred to in this announcement.

Each of the Company, the Issuer, the Joint Bookrunners, Rothschild and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.

Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Bonds. The value of the Bonds can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Bonds for the person concerned.

In connection with the Offering, the Joint Bookrunners and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase securities and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities and any other securities of the Company or related investments in connection with the Bonds or the Company or otherwise. Accordingly, references to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Joint Bookrunners and any of their respective affiliates acting as investors for their own accounts. The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Joint Bookrunners, Rothschild or any of their respective directors, officers, employees, affiliates, advisers or agents accepts any responsibility, duty or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.