City headhunter's bow out with £1bn float

Michael Page, the City recruitment firm, is to be freed from its American owner and is planning a £1bn return to the London Stock Exchange.

Michael Page, the City recruitment firm, is to be freed from its American owner and is planning a £1bn return to the London Stock Exchange.

Spherion Corporation, a human resources group based in Florida, bought Michael Page, which was then listed in London, in 1997. It has now decided to divest the business, which was never integrated, a move which will see it make a handsome return on its $578m (£385m) investment. Michael Page is the biggest operator in the professional sectors in which it specialises, namely accounting and finance, technology, sales and marketing.

Spherion has hired Credit Suisse First Boston, the investment bank, to "explore strategic alternatives", sources said. Spherion's preferred option is a listing in the first half of next year.

It would follow the successful London float, earlier this year, of Robert Walters, a smaller recruitment company also focused largely on the same markets.

Robert Walters was also listed in London after it was bought by a US company, StaffMark, in 1998 for £113m. Like Michael Page, it is believed to have had an unhappy experience in American hands. StaffMark spun off Robert Walters in July, a listing also handled by CSFB. The float, at 170p a share, valued Robert Walters at about £150m. Its shares closed on Friday at 219p, having been as high as 257.5p during the summer.

Analysts said Robert Walters enjoyed a smooth float, despite volatile markets, as it was already known by London's institutional investors due to its previous listing. It is thought the same will apply to Michael Page, which analysts have valued at between £700m and £1bn.

Industry sources said a trade sale for Michael Page remained possible although a float is, by far, the most likely outcome. Spherion will release detailed information on its plans for Michael Page on 2 November, along with its third-quarter earnings figures.

Michael Page's annual revenues are forecast to touch $600m (£400m) this year. It has grown sales at 31 per cent compound over the last four years while sustaining margins in the mid-teens. With a network of 79 offices in 13 countries, Michael Page places more than 20,000 full-time and over 15,000 contract candidates a year.

The recruitment market in financial services and IT is booming. Mergers and acquisitions among investment banks, and huge expansion plans by the leading banks, means that staffing services from firms that can offer global reach are much in demand.