HCL set to acquire Axon as Infosys bows out of the race

With no third suitor in sight and its competitor Infosys Technologies today announcing not raising the bid price from 600 pence a share, HCL Technologies is likely to go ahead with the acquisition of UK-based SAP consultancy firm Axon plc.

Bangalore-based Infosys today said it would not raise the bid price of 600 pence a share for UK-based Axon which had already decided to go ahead with a 441-million-pound acquisition offer from rival company, withdrawing its support to lower its bid of 407.1 million pounds.

HCL had offered to pay 650 pence per share, 8.3 per cent higher than rival Infosys. A company release on the development is expected later in the evening.

"After careful consideration, the board of Infosys has concluded that it will not increase the price of its original offer August 25, 2008. Infosys has a fast-growing and profitable SAP-led business transformation practice. The company is confident that its decision will have no material impact on its strategic plans," Infosys said in a statement.

After HCL's offer, Infosys had the option to scale up its bid but it decided to go ahead with the original offer.

With no glitches, HCL is hoping to close the deal by the first quarter of next financial year.

The London Stock Exchange-listed Axon has over 2,000 employees at present, including 1,300 in the UK and the US. 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 pounds and 204.5 million pounds revenue for the year ended December 2007.