Manpower Says Yes to Sweetened Takeover Offer : Blue Arrow, Rival British Temporary Agency, Bids $1.33 Billion for U.S. Firm

Manpower Inc., the world’s largest temporary employment agency, accepted on Friday a sweetened $1.33-billion takeover bid from Britain’s Blue Arrow.

The two companies essentially would maintain independent operations under an agreement worked out with Blue Arrow Chairman Antony Berry, said Mitchell S. Fromstein, Manpower’s president.

Separately, the Swiss employment group Adia S.A., which had been considering a business combination with Manpower meant to blunt Blue Arrow’s takeover, announced that it had decided against a deal.

On Aug 15, Manpower rejected as inadequate the British company’s initial offer of $75 per share, or $1.21 billion for its 16 million shares.

On Friday, Blue Arrow raised its offer to $82.50 for all the 16.1 million outstanding shares of Manpower following several days of meetings this week.

Existing Format to Remain

Blue Arrow plans to finance the buyout with a rights issue, a type of share offering, aimed at raising about $1.32 billion. The company said it would offer its existing shareholders five new ordinary shares for each two they already held.

Fromstein told a late afternoon news conference that in talks with Berry he was assured Manpower would be able to continue under its existing format. There will be no staff changes and Manpower will continue its operations in 32 nations, he said.

The arrangement also allows Blue Arrow to open offices in Manpower’s territory.

“That was an important facet,” Fromstein said, adding the agreement did not include “rigid enforcement penalties.”

Fromstein said he might not sell his minority interest in Manpower, representing about 350,000 shares. He said he would hold a seat on the Blue Arrow board of directors. Fromstein said he was unsure when the acquisition might be completed but that it could be within a month.

Manpower’s stock had jumped past the original $75 a share offer announced earlier this month, on speculation that the bid was too low and that Blue Arrow either would have to raise it or face a possible bidding contest.

Manpower stock rose $3.75 to $81.75 on the New York Stock Exchange Friday. Blue Arrow closed at about $2.70 at current exchange rates, on the London Stock Exchange.

Manpower enacted a “poison pill” anti-takeover defense late in June, and following Blue Arrow’s initial offer strongly hinted it would act to remain independent. Manpower officials stated earlier this week they had held discussions with parties in addition to Blue Arrow about a possible merger, which would act to thwart Blue Arrow.

The merger with Manpower marks the most ambitious step in Blue Arrow’s expansion into the United States.

Since October, Blue Arrow has stepped up its strategy of expanding in the United States via acquisition, buying up six companies for a total of about $95 million.

Manpower has more than 1,300 offices worldwide and about 700,000 temporary employees on its payrolls. The company provides temporary clerical, secretarial and unskilled workers as well as word processors and skilled professionals.

The company had a profit of $31.1 million, or $1.95 per share, and revenue of $1.95 billion in the year ended Feb. 28.

The much-smaller Blue Arrow, in the fiscal year ended Oct. 31, 1986, posted a pretax profit of about $13.7 million, on revenue of $153 million.

In addition to providing private employment services, Blue Arrow has interests in business travel, executive recruitment and temporary help.

Adia said Thursday it had met Manpower executives to discuss a business arrangement that would help the Milwaukee-based company thwart Blue Arrow’s takeover bid.

Jean-Pierre Chiaradia, Adia’s senior vice president for corporate affairs, said in a telephone interview from Lausanne: “We got involved in talks to see if we could help Manpower but saw that it was not in our interest to make a transaction.”

“Our position is that we prefer to have a fair competitor like Manpower in different markets rather than a newcomer like Blue Arrow, which is trying to become world number one in temporary employment,” Chiaradia said.