The race for U.K.-based software company Axon on Friday turned aggressive with HCL Technologies making a counter bid to Infosys’ bid by raising the offer by 8.3 per cent to seal the biggest overseas deal by an Indian firm in this space.
HCL Technologies on Friday made an offer of 650 pence per share compared to Infosys’ offer of 600 pence announced late last month. This values Axon at 441.1 million pound ($810.8 million). After HCL’s offer, now Infosys will get a second chance to scale up its bid.
In case Axon’s shareholders decide to go with the Shiv Nadar company’s offer, Infosys stands to be paid one per cent of the deal amount as inducement.
HCL technologies has arranged a 400-million pound loan for the deal with balance of the money to be paid from internal accruals, HCL Technologies CEO Vineet Nayar told reporters, announcing the counter bid.
“HCL’s transformation journey enters an exciting phase where we are creating partnerships with high performance teams to become significant in our chosen areas of growth. We see Axon as transformational opportunity for HCL to become a significant player in the SAP services space,” Mr. Nayar said. When contacted, Infosys spokesperson said the company would discuss internally and take a decision.
The offer price values the entire issued and to be issued share capital of Axon at about 441.1 million pound. Last month, Nasdaq-listed Infosys said it had agreed to buy Axon for 407 million pounds ($753 million), valuing the firm at 600 pence a share.
HCL is hoping to close the deal by the first quarter of next financial year.
“Infosys is considering its position and urges Axon shareholders to take no action at this time,” the Bangalore- based company said in a statement and added that a further announcement will be made in due course.
While Infosys was positive that it would seal the deal by the year-end, HCL’s entry could delay it. After a bid is made by HCL, Axon’s shareholders could vote in favour of either of the bids.
Shareholders, however, have a prerogative to vote in favour of Infosys despite their bid being lower than HCL’s, an analyst explained.
The London Stock Exchange-listed Axon has over 2,000 employees at present, including 1,300 in the U.K. and the U.S. If Infosys bags the deal, it is slated to give it a major boost in the SAP space.
Axon had reported a profit before tax of 29.5 million pound and revenues of 204.5 million pound for the year ended December 2007.
Source: The Hindu