Adecco buys Spring

Staffing giant Adecco abandoned its hostile takeover bid for Michael Page last year but it made further inroads into the UK recruitment market today by snapping up Spring Group.

The Swiss group — the world's largest recruitment firm — has agreed to pay 62p a share for Spring Group, in a deal which values the company at £107.3 million.

Shares in Spring Group, which focuses on recruitment for technology companies, jumped 8½p to 61¼p on news of the bid.

Adecco, which concentrates on blue-collar recruitment, is keen to increase its exposure to the professional sector.

Adecco said in a statement: "With this transaction, Adecco will strengthen its position in the fragmented UK market and further increase its professional staffing exposure". Adecco's unsolicitied bid was rebuffed by City headhunter Michael Page a year ago, who said that the deal undervalued the company.

News of the takeover came as Spring Group posted a pre-tax loss of £1.4 million for the first six months of the year, compared with a profit of £3.4 million for the same time the previous year on the back of revenues down 10.5% at £224.3 million.

But the group said that demand for IT workers is holding up and its outsourcing arm has been boosted by a series of big contract wins.

Adecco, which also posted second-quarter results today, shocked the market by sinking into the red in the second quarter. The group made a loss of 147 million (£126 million) after impairment charges and said there is no pick-up in trading. Revenues slumped almost a third to 3.6 billion as businesses worldwide halted hiring.