Adecco still has options even if Page bid fails

By Katie Reid - Analysis

ZURICH (Reuters) - Adecco's chances of succeeding in its bid for staffing group Michael Page look slim, but there are other companies that would be a good fit for the world's largest staffing firm.

Adecco has a warchest of 1.4 billion euros and is looking to strengthen its position in the higher-margin professional and permanent staffing market. It has been on the prowl for buys for several months.

"We think the gap between the 400 pence offered for Michael Page and what we believe is needed to get a friendly deal is too big," said ING analyst Marc Zwartsenburg.

Michael Page, which specializes in the professional staffing market, has twice rejected as too low an offer from Adecco valuing it at 1.3 billion euros (1.04 billion pounds), or 400 pence per share, and has stressed its desire to remain independent.

Since Michael Page's latest rejection on August 15, Adecco has said it wants to secure a friendly takeover but would keep its options open, refusing to rule out a hostile bid.

Michael Page is well positioned to remain independent, analysts have said, and the management has the backing of major shareholder Standard Life, which has also said the Adecco approach was too low. "I do not think Michael Page needs Adecco at all. It has critical mass and is a very substantial business," said Investec analyst Robert Morton.

Others have questioned the business rationale behind an acquisition, pointing out that synergies are limited as primarily blue-collar temping agency Adecco and white-collar Michael Page operate in very different markets.

OTHER OPTIONS