The board of Michael Page has announced that  it has ended discussions with Adecco about a possible takeover.

In a statement, Michael Page said it had rejected two separate proposals by Adecco and that discussions between the two companies had now ended. 

Michael Page said that Adecco’s first proposal, which it had received on 11 June, had been to acquire its entire issued share capital at around 440p per share in cash. However, it said this proposal had been rejected because it  “materially undervalued the company and its prospects” and because it considered “that the interests of the company’s shareholders and employees would be better served by Michael Page remaining an independent entity.”

Michael Page also explained why it had rejected a revised proposal received on 12 August.

“Under this revised proposal, Michael Page would issue new ordinary shares to Adecco such that Adecco would own at least 50.1 per cent of the existing issued share capital of Michael Page; Michael Page would remain listed on the London Stock Exchange with Adecco as the majority shareholder; the price at which Adecco would subscribe for the new shares would be consistent with the 400p per share previously indicated; and Michael Page would return the proceeds of the share issue to its existing shareholders.

“The effect of this proposal would be that existing Michael Page shareholders would receive around 200 pence per share in cash in return for their shareholdings being diluted by around half, with Adecco taking a majority, controlling shareholding.”

Michael Page explained that it had rejected this proposal because the board “unanimously concluded” that it “also materially undervalued the company and its prospects and that the proposed transaction structure was unattractive for shareholders, as they would become minority shareholders in a company controlled by Adecco. 
 
“Although further talks have taken place with Adecco and its advisers, Adecco has not increased the level of its offer.”

The board of Michael Page continues to believe that the company’s clear strategy of organically diversifying its activities by geography and discipline and increasing its exposure to growth markets, together with the longer-term structural growth drivers of the specialist recruitment market, mean that the company has excellent prospects and that the interests of the company’s shareholders and employees are best served by Michael Page remaining an independent entity.”

In a statement, Adecco responded: “Adecco notes the announcement made this morning by Michael Page and announces that it is still considering its position regarding a possible offer.

“Adecco believes that there is scope for a combination with Michael Page which is to the benefit of both companies and their respective shareholders. Adecco places considerable value on the management and strong culture of Michael Page.  It is therefore important to Adecco that it is able to retain the senior management of Michael Page in the event that an offer is completed. Adecco has been unable to engage in satisfactory discussions to gain comfort on this issue.”