The banking downturn has hit UK profits at takeover target Michael Page International (MPI) the recruitment business with branches in the West Midlands.
The group generates a third of its business from the UK, where half-year operating profits decreased by 0.7 per cent to £28.4 million, the firm said in its interim announcement.
Outside of banking the company said it continued to experience strong levels of activity, although it noted a greater degree of caution among clients and job candidates.
Michael Page said moves to diversify the business meant it was better placed than in the previous economic downturns of the early 1990s and 2000s. This was highlighted by strong growth in Asia Pacific, helping the group report total operating profits up 22 per cent to £84.9 million in the six months to June 30.
The company is currently the subject of £1.3 billion takeover interest from bigger European rival Adecco, which yesterday said it was considering its options after the rejection of an earlier takeover proposal by Michael Page.
The FTSE 250 Index-listed company has asked the City’s takeover watchdog to agree a “put up or shut up” deadline for Adecco to either make a firm offer or walk away.
Yesterday’s statement from Adecco signalled that the Zurich-based company may be prepared to table an offer direct to shareholders, without the support of the Page board.
The company said: “While it is focused on negotiating a recommended offer for Michael Page, Adecco is keeping all its options open at this stage.”
Michael Page saw its shares soar more than 30 per cent after it revealed the takeover talks earlier this month.
The company was launched in 1976 by Michael Page and Bill McGregor from an office in London and made its first move overseas in 1985, opening an office in Australia. Mr Page retired from the business in 1995.
The group operates through 166 offices in 28 countries worldwide and has more than 5,500 staff. It employs around 1,850 people in the UK, a figure which increased this year following the opening of new offices at Cardiff, Newcastle and Canterbury.
Page chief executive Steve Ingham admitted that the company’s rejection on Friday of Adecco’s 400p a share offer proposal was “not the end of the matter”.
He went on to say: “We want a ‘put up or shut up’ to put some clarity on the timescale. The first contact was made quite some time ago and I think the Takeover Panel will put a deadline to it. If they want to do something within that deadline, that’s up to them.
“If they are as good as their word, then it will be friendly. They’ve made a lot of comment in the press about wanting to make a friendly approach.”
Collins Stewart analyst Richard Carter said he thinks Adecco will need to return to the negotiating table with a cash offer of 450p per share and that ultimately a deal that prices Page below 500p a share is unlikely.