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Equity Bottom-Up

Edison Investment Research is terminating coverage on AdAlta (1AD), Acorn Income Fund (AIF), GCP Student Living (DIGS) and Brighter (BRIG). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.

Edison Investment Research is terminating coverage on AdAlta (1AD), Acorn Income Fund (AIF), GCP Student Living (DIGS) and Brighter (BRIG). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.

GCP Student Living - Termination of coverage

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

A consortium formed by Scape Living PLC and iQSA Holdco Ltd entered into an agreement to acquire <a href="https://www.smartkarma.com/entities/gcp-student-living-plc" target="_blank" data-smartkarma-citation="entities:33771:1" rel="noopener">GCP Student Living (DIGS LN)</a> for approximately £969 mn on 16 July, i.e. 213p/share, cum dividend, via a scheme of arrangement.
The consortium is partially funded by equity from their respective primary shareholders, being funds managed by APG Asset Management N.V. and Blackstone. Scape Living and iQ have entered into a separation agreement pursuant to which, it is intended that all existing real estate assets owned by GCP will be transferred to Scape Living and iQ or their respective affiliates.
The transaction is subject to conditions including, approval from not less than 75% GCP Student Living plc shareholders, approval from court, approval from Competition and Markets Authority, approval from third parties.
The GCP Student Living plc directors intend to recommend unanimously that the scheme shareholders vote in favour of the scheme at the court meeting and the resolutions relating to the acquisition to be proposed at the GCP general meeting.
A shortfall of beds relative to student accommodation demand has seen increased interest from money managers in recent years. This business provides predictable income and recurring cash flows, although the alternative use of the assets as apartment or studios is very attractive.
Competitors of GCP, Scape Living and iQ are The Unite Group (UTG LN), the top listed player in the sector (with over 74,000 beds), Empiric Student Property (ESP LN), the Halls of Residence from the University of London and other independent players (Goodenough College, etc.).
At a 9.3% premium to pro forma EPRA NTAV of 195 p/share, this seems to me a knock-out bid. While it may be discussed whether this offer is opportunistic after a period of Covid &amp; Brexit related underperformance, the truth is that as the Board puts it, removes uncertainties. The consortium bets that full occupancy could be achieved soon (consensus does not forecasts it until 2023e).
There has been a high volume of shares traded since announcement, the market seems to bet on a sweetened bid or a competing offer (from Unite, Empire or others). 
GCP closed ay 214p/share on 212 July, a c. (0.5%) gross spread.
BUY on dips.

A consortium formed by Scape Living PLC and iQSA Holdco Ltd entered into an agreement to acquire GCP Student Living (DIGS LN) for approximately £969 mn on 16 July, i.e. 213p/share, cum dividend, via a scheme of arrangement.
The consortium is partially funded by equity from their respective primary shareholders, being funds managed by APG Asset Management N.V. and Blackstone. Scape Living and iQ have entered into a separation agreement pursuant to which, it is intended that all existing real estate assets owned by GCP will be transferred to Scape Living and iQ or their respective affiliates.
The transaction is subject to conditions including, approval from not less than 75% GCP Student Living plc shareholders, approval from court, approval from Competition and Markets Authority, approval from third parties.
The GCP Student Living plc directors intend to recommend unanimously that the scheme shareholders vote in favour of the scheme at the court meeting and the resolutions relating to the acquisition to be proposed at the GCP general meeting.
A shortfall of beds relative to student accommodation demand has seen increased interest from money managers in recent years. This business provides predictable income and recurring cash flows, although the alternative use of the assets as apartment or studios is very attractive.
Competitors of GCP, Scape Living and iQ are The Unite Group (UTG LN), the top listed player in the sector (with over 74,000 beds), Empiric Student Property (ESP LN), the Halls of Residence from the University of London and other independent players (Goodenough College, etc.).
At a 9.3% premium to pro forma EPRA NTAV of 195 p/share, this seems to me a knock-out bid. While it may be discussed whether this offer is opportunistic after a period of Covid &amp; Brexit related underperformance, the truth is that as the Board puts it, removes uncertainties. The consortium bets that full occupancy could be achieved soon (consensus does not forecasts it until 2023e).
There has been a high volume of shares traded since announcement, the market seems to bet on a sweetened bid or a competing offer (from Unite, Empire or others). 
GCP closed ay 214p/share on 212 July, a c. (0.5%) gross spread.
BUY on dips.

Scape Living & IQ / GCP Student Living: Knock-Out Offer

United Kingdom

GCP Student Living plc operates as a student accommodation REIT. The Company invests in modern purpose built private student accommodation and teaching facilities located in London.

GCP Student Living (DIGS LN)

GCP Student Living - Termination of coverage

Edison Investment Research is terminating coverage on AdAlta (1AD), Acorn Income Fund (AIF), GCP Student Living (DIGS) and Brighter (BRIG). Please...

Edison Investment Research

Scape Living & IQ / GCP Student Living: Knock-Out Offer

At a 9.3% premium/pro forma EPRA NTAV, this is a knock-out bid, maybe opportunistic due to Covid & Brexit, consortium bets on full occupancy soon....

Jesus Rodriguez Aguilar