Manpower, which rejected an unsolicited $1.2-billion takeover bid over the weekend, is seeking to acquire a major company in the temporary employment business in an effort to remain independent, Manpower's president said Sunday.
Executives of the company, the world's largest temporary help firm, met Sunday at their Milwaukee headquarters to seek alternatives to the $75-a-share acquisition offer made by Blue Arrow, a much-smaller British concern. As expected, the directors of Manpower on Saturday rejected Blue Arrow's bid as "inadequate and not in the interests" of the company and its shareholders.
Mitchell S. Fromstein, Manpower's president and chief executive, said in a telephone interview that the company's efforts are "centered" on acquiring a business in a stock deal "that is of substantial size, that has a record of experience and growth and good profits."
He added that the firm has spent the past week speaking to a number of companies that fit the description, but he declined to identify them. Manpower is looking at both publicly held and private companies, Fromstein said.
Manpower is vulnerable to a takeover because management holds less than 5% of its stock, according to Judith Scott, an analyst with the brokerage firm of Robert W. Baird in Milwaukee.
Fromstein ruled out the possibility of trying to acquire Blue Arrow. "The nature of this business is so highly personal, the people in it are so important that their good will and commitment and acceptance of a new owner are paramount to the continuation of that organization."
David Atkins, president of Blue Arrow's U.S. operations, said Sunday that the British firm must study Manpower's response before making a statement.
On Friday, Manpower closed on the New York Stock Exchange at $74.75, off $1.25, apparently in anticipation of weekend developments. Manpower had made it widely known that it was studying alternatives since Blue Arrow launched its offer Aug. 4.
Fromstein described the search for an acquisition as "option one" or a "vitamin pill."
"By that," he said, "I mean it is not only a means to do the job of blocking a takeover, it gives additional corporate strength and earnings."
He said Manpower's second option is to consider issuing a "poison pill," a financial maneuver that burdens a company with debt and makes it a less attractive takeover candidate.
Directors of Manpower, which operates 1,337 offices in 33 countries, authorized management to prepare such a plan.
Fromstein said the New York law firm of Wachtell, Lipton, Rosen & Katz, which created the poison-pill concept, is working on such a plan.