Saturday, December 1

Randstad, Vedior Buyout Talks Brewing

Dutch employment agency Randstad confirmed on Friday it was in talks to potentially acquire its rival Vedior, which could result in a break-up of the business and even see Switzerland's Adecco muscle in. Vedior (other-otc: VEDRF - news - people )'s stock had spiked 50.4%, or 6.20 euros ($9.16), to 18.50 euros ($27.32), during morning trading in Amsterdam on Friday, amid intense speculation that Adecco (other-otc: AHEXF - news - people ) was planning a takeover or break-up bid. But the Dutch regulator stepped in before midday and suspended trading, which led Vedior to confirm that talks were indeed taking place--but with Dutch rival Randstad (other-otc: RANJF - news - people ) instead.
"Preliminary discussions are being held in a friendly way, leading to a possible combination with Randstad," said Vedior. "This may include a public offer by Randstad for Vedior. The indicative proposal received from Randstad includes a significant equity component." Shares in Randstad plummeted 1.92 euros ($2.84), or 5.9%, to 30.70 euros ($45.33), during afternoon trading in Amsterdam, after shooting up 19.3% Friday morning. Adecco gained 2.30 Swiss francs ($2.05), or 3.7%, to 64.20 francs ($29.53) in Zurich. Theodor Gilissen analyst Johan van den Hooven told that a likely bid of 20 euros ($17.85) per share or higher for Vedior would set Randstad back a total of 4 billion euros ($5.9 billion), including debt. But he added that a break-up bid could make more sense, with Vedior's French business likely to be the focal point. "The preliminary discussions with Randstad could be about France," said Van Den Hooven. He said Vedior's new chief executive, former Unilever (nyse: UL - news - people ) man Tex Gunning, had promised a strategic review of the company next February. With Vedior's stock down over 15% since the start of this year, and its French subsidiary offering sluggish growth relative to the rest of the business, Gunning's move suggested a spin-off was in the works. And if Randstad is after Vedior's French operations, a break-up could suit world number one Adecco. The Swiss agency has been the target of speculation as a possible buyer of Vedior, but buying the whole company would draw the scrutiny of market regulators, particularly over Adecco's strong grip on the French market.

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