HCL Technologies and Infosys Technologies declined in Mumbai trading on concern they may overpay for UK-based software consultant Axon Group, in India’s first bidding war for overseas assets.
HCL slid 8.3 per cent, the biggest drop in two weeks, while Infosys fell to a six-month low. HCL offered 650 pence for each Axon share, valuing the Egham, England-based company at £441.1 million.
That’s 8.3 per cent more than Infosys agreed to pay last month. HCL took on its larger rival to gain Axon’s expertise in products developed by SAP AG after reporting its first profit drop in three years. Axon surged to above HCL’s offer, indicating investors are counting on a higher bid.
“Retaliation from Infosys is almost certain,’’ Tarun Sisodia, a Mumbai-based analyst at Anand Rathi Securities, wrote in a note to clients today. “The deal would be unattractive for both parties in the short term.’’ He estimated that bids may rise beyond 700 pence a share.