Analysts specialising in the recruitment sector have down played the chances of a bid for Hays by Adecco, Manpower, or Randstad.

Yesterday’s Financial Timesand Daily Telegraphmentioned a 140-150p bid for Hays, and reported that that Hays’ shares rallied by 5% on Wednesday due to speculation over a 140-150p bid for Hays by Adecco, Manpower or Randstad.


James Wellesley Wesley, partner at corporate finance advisers Wyvern Partners, told Recruiter a bid for Hays was possible, but unlikely.


“It’s not impossible is the short answer. Hays is much more vulnerable than in the past.  First of all Hays has a relatively new CEO - around two years in the job - and arguably it had a lucky recession.


Wellesley Wesley added that Adecco is ambitious and that “it might make quite a bit of common sense in the UK” because the two companies complement one another.


However, he added: “Nine times out of 10 this is going to be someone [a journalist] drivelling on a page without any truth, but there is some chance of it happening. It’s usually complete drivel, coming from someone who is bored on a Wednesday afternoon.”

Kean Marden, head of support services equity research, RBS global banking & markets, told Recruiter: “We believe a bid is unlikely as Adecco and Randstad are only interested in bolt-ons.


“Adecco acquired Spring and MPS last year and has indicated that it is now only interested in small bolt-ons, primarily in recruitment’s emerging markets.


“Randstad acquired Vedior in 2007, it’s net debt/EBITDA (earnings before interest, tax depreciation and amortisation) ratio was 2.4x in Q2 2010 and during an investor roadshow with RBS last week management reiterated that they were not planning any major M&A initiatives.

“The Hays bid story emerges about once a year, normally after a rally in the share price. In our view, Wednesday’s +5% move was driven by a confident management roadshow with investors, the first EPS upgrades for two years and the anticipation that more will occur after the 7 October Q1 interim management statement.”


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