Dutch recruitment firm buys Select for pounds 1.145bn

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The Independent Online
SHARES IN Select Appointments, the UK recruitment group, rose pounds 1.52 to pounds 10.37 yesterday after Vedior, a Dutch employment agency, said it would buy the company for pounds 1.145bn.

Vedior has made a recommended cash offer for the entire share capital of Select that values each of the company's shares at pounds 10.50. This represents a premium of 18.5 per cent based on the closing middle market price of Select shares on Tuesday.

Analysts say this is not a knock-out price, but it is fair. Select's shares ended 1998 on a low of pounds 3 after the downturn in Asian markets sent the company's value plummeting. If the deal goes ahead, it will represent the largest cash acquisition of a staffing company, topping Blue Arrow's takeover of Manpower in the early 1990s.

The two companies have been in talks for the past three months. It is believed their agreement was prompted by the desire of Select's Investor Group - comprising Odyssey Investments, Waverley, WST and SIH - to cash in its 36.7 per cent stake in the company. The group has agreed to subscribe for up to pounds 109m in new Vedior shares if requested.

Vedior went public last year and has a market capitalisation of pounds 1bn. The firm specialises in traditional staffing, placing clerical and light industrial workers. It operates in nine European countries but is focused on France, Belgium and Spain. According to a spokesman, Vedior was attracted to the Select acquisition because it was looking to develop the specialist side of its business and because it provides access to US and UK markets.

Select is a rapidly-growing specialist recruitment company, which focuses on the IT and accountancy sectors. It has been the most acquisitive staffing company of the 1990s, having bought 55 small businesses in the period.

Neither company would comment on whether there would be job losses, but a Select spokesman said: "This is not a cost-cutting exercise. It is intended to create a strong platform for the company to grow."