Michael Page rebuffs £1.3bn bid from headhunter Adecco

Recruitment firm Michael Page International today rejected the £1.3billion takeover approach by the world's biggest headhunter Adecco.

Adecco approached it in May with an unsolicited but "friendly" bid of 400 pence a share.

Michael Page said Adecco later revised the proposal with a suggested deal where Michael Page would issue shares so that Adecco would own more than 50.1% of the firm.

"Although further talks have taken place with Adecco and its advisers, Adecco has not increased the level of its offer," Michael Page said.

"The board... unanimously concluded that this revised proposal also materially undervalued the company and its prospects and that the proposed transaction structure was unattractive for shareholders," the company said.

It will now seek a formal timetable with the Takeover Panel under which Adecco must either announce a firm intention to make an offer for Michael Page or pull back from the deal.

Adecco responded that it had been unable to gain assurances that senior Michael Page management would stay with the business.

"We have been unable to engage in satisfactory discussions to gain comfort on this issue," it said.

Dieter Scheiff, chief executive of Adecco, has always said he wanted the deal to be friendly.

"Michael Page is really a jewel in the professional business and the management is also very great. Our objective is definitely to do a friendly approach," he said this week.

Adecco said that if a deal could be worked out, Michael Page would fit in well with the Swiss company's desire to "focus on professional and specialised business fields" to improve its margins.

Despite this, relations between Michael Page and the Swiss company have been prickly.

Michael Page, with 5,500 employees, would have been Adecco's largest acquisition to date.

The recruitment industry is facing difficult times amid the global economic slowdown.