Axon has opted to go for the higher bid of India’s fifth largest IT services firm HCL Technologies as against the earlier bid by the India’s second largest IT firm Infosys. This was communicated by Axon to the London Stock exchange, which said that, “The Board is pleased that HCL has recognised the quality of the Axon business and has announced its intention to make an offer. Accordingly, the Board has withdrawn its recommendation of the Infosys Offer and intends unanimously to recommend the HCL Offer when it is made.”
Axon also said that it gave Infosys a period of 60 hours to mull over the bid made by HCL. During the 60 hour period Axon is prevented from varying or amending its recommendation has now elapsed. In August this year, Infosys had announced a cash offer of 600 pence per share of Axon Group or GBP407 mn. But in September HCL rivaled the offer for 650 pence, 8.3% higher than Infosys bid and valuing Axon for GBP 441 mn.
Infosys however has said it is keeping its options open on making a counter-bid for Axon. Speculations are rife that the revised bid by Infosys may moderately increase in the range of 7-8% over the HCL offer; this counter offer can be expected when Infosys unveils its quarterly results on October 3.
Both the bidders are targeting European companies as they want to reduce their dependence on America, especially with the prospects of recession looming large in the US, and to increase our revenues from Europe and the rest of the world. SAP implementation and its importance has also been an important factor in this deal as Axon specialises in serving software developed by the German firm SAP and advise clients such as Vodafone and Barclays on implementation. If HCL is successful in acquiring Axon, it will be catapulted to the 12th position in terms of SAP implementation globally, while Infosys’ successful bid will make it the 10th largest SAP player. Among other things, the proposed purchase would be the biggest overseas acquisition ever by an Indian IT company.
Axon also said that it gave Infosys a period of 60 hours to mull over the bid made by HCL. During the 60 hour period Axon is prevented from varying or amending its recommendation has now elapsed. In August this year, Infosys had announced a cash offer of 600 pence per share of Axon Group or GBP407 mn. But in September HCL rivaled the offer for 650 pence, 8.3% higher than Infosys bid and valuing Axon for GBP 441 mn.
Infosys however has said it is keeping its options open on making a counter-bid for Axon. Speculations are rife that the revised bid by Infosys may moderately increase in the range of 7-8% over the HCL offer; this counter offer can be expected when Infosys unveils its quarterly results on October 3.
Both the bidders are targeting European companies as they want to reduce their dependence on America, especially with the prospects of recession looming large in the US, and to increase our revenues from Europe and the rest of the world. SAP implementation and its importance has also been an important factor in this deal as Axon specialises in serving software developed by the German firm SAP and advise clients such as Vodafone and Barclays on implementation. If HCL is successful in acquiring Axon, it will be catapulted to the 12th position in terms of SAP implementation globally, while Infosys’ successful bid will make it the 10th largest SAP player. Among other things, the proposed purchase would be the biggest overseas acquisition ever by an Indian IT company.
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