European education group eyes takeovers of UK universities

{"text":[[{"start":6.4,"text":"Europe’s biggest for-profit higher education group has said it is eyeing financially distressed British universities as takeover targets, arguing that private money could help transform a struggling sector."}],[{"start":17.85,"text":"Kamil Senhaji, chief executive of Paris-based Galileo Global Education, said Britain was “an appealing market” for long-term investment in universities, adding that he was having “discussions” about possible acquisitions."}],[{"start":30.85,"text":"Britain has only a handful of for-profit universities and Senhaji said the scepticism towards the model in the sector was “a hurdle to overcome” in much of Europe. But he argued that private capital was better placed to invest than a financially stretched public sector. "}],[{"start":32.25,"text":"Galileo, owned by the Bettencourt family and the Canadian pension fund CPPIB, has built up 130 campuses in 20 countries since it was founded 15 years ago and now teaches 300,000 students. "}],[{"start":46.4,"text":"Senhaji said that “we are for-profit, so no taboo about that”, but the company has yet to pay a dividend and he is at pains to differentiate Galileo’s “very long-term capital” approach from the franchising model in UK higher education. "}],[{"start":60.349999999999994,"text":"Analysis by the FT recently found that one in ten full-time undergraduate students in England was now taught by for-profit franchise companies, which hand traditional universities a cut of tuition fees in exchange for validating degrees. The biggest, Global Banking School, is now the largest teacher of full-time undergraduates in the country. "}],[{"start":80.39999999999999,"text":"“A diploma is not for sale,” Senhaji said. He added that the franchise model was either “super-controlled” or it could be “a scheme that is dangerous in terms of quality and outcome”."}],[{"start":93.3,"text":"The rise of franchising has been driven by growing financial pressures on UK universities, as tuition fees have failed to keep pace with costs and governments have cracked down on lucrative overseas students. "}],[{"start":105.2,"text":"More than 40 per cent of universities are now forecasting a deficit in England and Senhaji said: “We say let’s keep our ears wide open, let’s keep all our channels open and contact people.” "}],[{"start":117.35000000000001,"text":"He said his “M&A team are always busy” and the company was “active” in considering targets. He declined to name universities under consideration, saying there was “nothing advanced” but stressed his interest was “not theoretical”. "}],[{"start":132,"text":"However, Senhaji insisted his attitude was not “we have a distressed market, let’s hunt”, saying he wanted to replicate the turnaround at Regent’s University London, a small 2,500-student institution that Galileo took over when it was in financial difficulties in 2020."}],[{"start":null,"text":"

"}],[{"start":148.85,"text":"“We did it well, I think, here at Regent’s and we’ll be happy to reproduce that. So we are open to do more on the UK market,” he said. "}],[{"start":156.35,"text":"Despite what Senhaji described as a “tense situation” for UK universities, he said he was a “big-time” believer in the long-term strength of British higher education. "}],[{"start":166.15,"text":"“If you want to be in one of the top three or top four student markets in the world, especially international students, you have to be the UK,” he said. “It was a strategic move to say, ‘we want to be in the UK’ . . . it is an appealing market if you have a long-term vision.”"}],[{"start":181.95000000000002,"text":"About half of students in some Latin American countries attend private universities, often for profit, according to Unicef data. But in Europe 85 per cent are in the public sector and Senhaji said: “In some markets there is still this for-profit legit or not, et cetera, which makes it a hurdle to overcome.” "}],[{"start":201.9,"text":"Professor Geoff Smith, vice-chancellor of Regent’s, said ownership by Galileo had enforced a “discipline” about its priorities and costs that other universities could imitate. "}],[{"start":213.15,"text":"“I’m surprised in a way there’s not more interest [in private ownership] given the pain out there,” he said. “Commercially speaking, we can breathe and we can invest in and really focus on the educational outcomes of our students.”"}],[{"start":226.65,"text":"Smith suggested that British universities were hiding behind the “residual glow” of their reputations, saying: “No one’s happy and yet I don’t see many universities really asking themselves the sort of existential questions that we had to go through.”"}],[{"start":247.5,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786345473_9452.mp3"}