Galileo’s acquisition of Regent’s University London, one of the UK’s biggest private non-profit universities, is a “devastating” move that could lead to redundancies, according to one of the institution’s former vice-chancellors.
Regent’s University London is set to join the Paris-based firm next month, subject to regulatory approvals and “property matters”, marking Galileo’s first buyout of a UK institution.
While the proposed acquisition promises to give the struggling institution a capital injection, Aldwyn Cooper, former vice-chancellor and chief executive of Regent’s, told THE that the institution’s board had previously agreed that a for-profit takeover “would never, ever happen”.
“We were proud of being a charity and of the charitable work that we were doing,” he said. “We felt that was the right way to go.”
Cooper, who led the institution for more than 12 years before retiring last summer, said he was “very depressed” by the takeover. “Changes were necessary, undoubtedly, but not this change.”
He added that he understood the deal to be based on a “worst-case forecast” by PwC, “which said that if Regent’s failed to reach its targets by 45% then it would be bankrupt next year”.
He questioned why the institution did not wait until the recruitment figures for this year were clear, before “making such a devastating decision”.
Regent’s was “a financially sound, internationally respected institution” when he retired a year ago, Cooper added. “I fear that the decision has been [made] to protect the private interests of the trustees who could be held personally liable for university debts, as has been used to justify similar actions elsewhere, rather than the philosophy and values of the institution and the education of its students.”
Cooper added he feared the proposed sale to Galileo may lead to significant redundancies and a shift to online delivery of education, which he claims is not part of the university’s ethos.
“I’m already getting a lot of correspondence from alumni, foreign students, staff, honorary senior fellows and partner institutions who are really not happy at all [about the proposed sale],” he said.
Under the proposed acquisition, Galileo, which runs 42 schools across 80 campuses in 13 countries, will “make a significant investment in the residual charity which would allow it to support students’ lives, in accordance with our charitable objects”, a Regent’s spokesperson told THE.
“Partnership with Galileo would strengthen and secure the university well into the future,” she said, adding that it would “expand our international reach and further strengthen our international reputation,” she added.
A source told this publication last week that Regent’s University will be provided with “at least” £20 million in working capital by its new owner. The liquidity boost will tide over the coronavirus crisis, which is expected to weigh heavily on enrolments of international students.
The spokesperson added that trustees “were not seeking to protect their own interests” and that their concerns “were focused on the interests of the university’s students”.
She added that travel restrictions imposed by the Covid-19 pandemic “may well have a negative impact on new student enrolment”, as the university relies heavily on income from international students, making up 80% of its student body. She would not rule out redundancies but said the institution would “seek to minimise these where we can”.
When the sale was announced earlier this month, Galileo’s chief executive Marc-Francois Mignot Mahon commented: “Following detailed work with the Regent’s management team, we are convinced that we can support them to accelerate the development of Regent’s whilst respecting its heritage and DNA.”
According to its 2019 strategic report, Regent’s University said it had recorded “lower-than-expected student numbers in autumn 2018”, noting that “revenue growth has been challenging for the university and remains a priority”.
In its report, the institution said that full-time student enrolments had fallen to 2,309 in 2018/19 from 2,503 in 2017/18 – a 7% reduction likely to be exacerbated this year by travel bans, social distancing and quarantine measures linked to Covid-19.
“The outlook for student recruitment remains challenging in the medium-to-long-term and competition for both UK and international students is fierce,” said Regent’s University in the report. “Growth remains the university’s highest financial priority.”
In March, Richmond, The American University – which had been teetering on the brink of bankruptcy after its former American benefactor died two years ago – was bought by China Education Group, a Hong Kong-listed operator of universities and vocational colleges in China.
Date published: 24 August 2020