Shares in Michael Page, the recruitment group, dived over 20 per cent today after Adecco, its Swiss rival, decided to scrap its £1.3 billion bid for the company.

Adecco, which first approached the British company in May, said that although it still has ambitions to expand, the response from Michael Page indicated that a deal was not possible on satisfactory terms.

However, the Swiss group did not rule out returning with a new offer at a later date, although it is barred under Takeover Panel rules from making another offer for six months unless there is a rival approach or a change of stance by Michael Page.

Michael Page, which twice rejected a 400p per share offer, said today that it had given Adecco’s proposals due consideration and unanimously concluded that they materially undervalued the company and its prospects.

Speculation that the bid may be coming to an end increased after the death last week of Klaus Jacobs, Adecco's founder and former chairman, who drove the company's expansion in high-margin professional staffing.

Shares in Michael Page, which have consistently traded below the offer price, lost 74.5p to 247.25p.

European staffing groups have been trying to merge in recent years and Adecco was keen to follow, after Dutch rival Randstad’s acquisition of Vedior for €3.2 million (£2.54 million) earlier this year.

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