HCL in bid to gazump Infosys on Axon Group acquisition
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Indian IT services company submits rival bid for UK-based SAP consultancy almost a month after Infosys claimed the deal
HCL Technologies, an Indian IT outsourcing provider, has launched a rival bid for UK SAP consultancy group Axon, which Infosys agreed to acquire in August 2008.
The offer is for 650p per share, which values the company at £441.1 million. This represents a 42.6% premium on the company’s average share price during the last financial quarter. Infosys had offered 600p a share, a 19% premium.
HLC said in a press conference this afternoon that Axon Group’s board of directors had recommended its offer – the largest in the history of the Indian IT industry – to the shareholders.
It does not characterise the offer as a counter-bid, saying that it had been in discussions with the company since July 2008.
“HCL has identified eight focus areas for growth including enterprise application services,” said Anil Chanana, the company’s executive vice president for finance. “HCL follows a thorough and diligent selection process of proactively identifying acquisition opportunities, and evaluating them rigorously against our long-term strategic growth objectives to create incremental shareholder value.”
However, according to unconfirmed reports in Indian newspaper The Economic Times, bidding activity was reignited after the announcement of the Infosys deal, once other potential suitors had seen the low price it had agreed to pay. Axon, the newspaper claims, was originally looking for 700p.
Axon Group, which was set up in 1994 by an ex-SAP employee, counts BP and Transport for London among its customers.
Further reading
And so it begins...
Does Infosys's acquisition of UK SAP consultancy Axon Group signal the start of the Indian IT services takeover?
