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Michael Page, the listed UK recruitment company, will await clarification about Adecco’s next move before considering going forward with defence plans, dealreporter understands.
This includes engaging with shareholders on the merits of independence and any consideration of white knights or other defences.
A Michael Page insider added separately that the ball is in Adecco’s court and that the UK-based target company will wait for Adecco either to take the initiative or face an expected “put up or shut up” deadline from the Takeover Panel. Michael Page applied last Friday for a deadline to be imposed. The Panel has yet to announce a date but deadlines are usually set five to six weeks from application, a spokesperson for Michael Page said previously.
Asked whether Michael Page’s management has been roadshowing, the insider said that management has been speaking to shareholders following the announcement of the company’s interim financial results on Monday as it normally would.
An industry source commented that other defence options, such as finding a white knight in Manpower or MPS Group, are available to explore but could raise branding and other problems just as with Adecco.
Adecco and Manpower are both strong in blue collar recruitment, which could threaten Michael Page’s white collar identity, he said. Michael Page focuses on staffing in accounting and finance, while Adecco generates about 55% of its revenues in the industrial sector.
Staffing firms see revenues decline in negative economic cycles, and while there has been a slowdown in temp hiring, it has been less marked in the white collar space, the source explained. White collar temp staffing is less cyclical, is affected later by downturns, and recovers more quickly. Blue collar staffing, however, has been declining since January 2007, the source said.
Brand name could also be an issue. Manpower often buys white collar staffing companies and changes the name to Manpower Professional. Changing its culture and its pay plan could also make it more difficult for Michael Page to retain qualified professionals, the industry source said.
A takeover by a large firm could also threaten Michael Page’s boutique appeal, the source said. Badenoch & Clark, the UK finance and accounting arm of Florida-based MPS Group, California-based Robert Half International, and UK-based Robert Walters, all compete with Michael Page, he said.
On the other hand, the Milwaukee, Wisconsin-based Manpower would benefit from adding UK and European finance and accounting resources to its portfolio and may be a better cultural fit than Adecco, the industry source said.
MPS Group may be too similar to Michael Page to make sense as a buyer, and is no longer in a roll-up phase, seeking only strategic acquisitions, the source said. Robert Half is a USD 4bn company with about half of its business from accounting and finance, but it only makes occasional tuck-in acquisitions, and would be unlikely to bid for Michael Page, the source said. Robert Walters, meanwhile, is not likely to have the financial wherewithal to bid.
Still, as Europe may be following the lead of the US and entering into a recession, now may be a good time for Michael Page to sell if it believes a downturn is imminent, the industry source countered.
In agreement with previous reports, the industry source said 6 – 7 x EBITDA would be a reasonable offer for Michael Page, if not more. But again, an impending recession could dampen valuations, the source added.
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