Date:03/10/2008 URL: http://www.thehindu.com/2008/10/03/stories/2008100356981600.htm

Business

HCL wins over Axon board for takeover bid

British company shareholders’ nod awaited

LONDON: British consultancy major Axon Group on Thursday decided to go ahead with the 441-million pound acquisition offer from HCL Technologies, while withdrawing its support to a smaller bid from Infosys.

Noting that the HCL offer is at a premium of 8.3 per cent to Infosys’ bid, worth 407.1 million pound, Axon said in a regulatory filing here that its board “has withdrawn its recommendation of the Infosys offer and intends unanimously to recommend the HCL offer when it is made”.

When contacted, an Infosys spokesperson told PTI that the company was evaluating its options and would announce any further move at an appropriate time.

HCL officials said that they were confident of winning over the support of the Axon board for its offer.

Infosys had announced on August 25 a recommended cash offer of 600 pence a share for the Axon Group.

Axon had subsequently posted the scheme documents regarding the Infosys offer to its shareholders on September 20. However, HCL Technologies announced on September 26 its intention to counter the Infosys bid with a cash offer of 650 pence a share for Axon.

Axon had entered into an implementation agreement with Infosys, under which it undertook that, in the event of a competing proposal being received from a third party, the board would not vary or amend its recommendation of the Infosys offer for 60 hours from the time Infosys was notified of the competing proposal. “The 60-hour period during which Axon is prevented from varying or amending its recommendation has now elapsed,” Axon said.

“Axon and HCL have enjoyed a long standing relationship. The board is pleased that HCL has recognised the quality of the Axon business and has announced its intention to make an offer,” the U.K. firm said.

“The HCL offer values Axon’s existing issued and to be issued (fully diluted) share capital at about 441 million pound,” it noted.

Announcing its intention to recommend an HCL offer when it was made, Axon said that “a further announcement will be made when appropriate”.

In case Axon’s shareholders decide to go with the HCL offer, Infosys stands to be paid one per cent of the deal amount as inducement. — PTI