Infosys Technologies today said it is keeping its options open on making a counter-bid for Axon, even as the UK firm decided to back the takeover bid made by HCL Technologies.
“We will stand by whatever we announced last Friday. We are still evaluating our options and will announce it at an appropriate time,” V Balakrishnan, chief financial officer, Infosys, told Business Standard. He said there is no deadline for the revised offer, but the Axon Board has the option to withdraw the recommendation for the HCL bid in case Infosys decides to make a revised offer.
Earlier today, Axon informed the London Stock Exchange that the board has withdrawn its recommendation of the Infosys offer of 600 pence a share and intends to recommend the HCL offer when it is made.
Axon also said that it gave Infosys 60 hours to mull over the bid made by HCL.
The 60-hour period, during which Axon is prevented from varying or amending its recommendation, has now elapsed.
HCL Tech, India's fifth largest IT services firm, had improved the offer to 650 pence, or 8.3 per cent higher than the Infosys bid, valuing Axon for £441 million (over $800 million).
Analysts are of the view that in case Infosys does bid, HCL Tech will up its offer further. "We are looking at this deal very logically and such financial decisions are taken after analysing the price points very carefully. Let something come up and we will take an appropriate action. But there is no question of a price war happening," said an official close to the development.
Sources said that in the revised bid, Infosys is intending to propose a moderate increase in the range of 7-8 per cent over the HCL offer. However, since there was every chance of the Delhi-based IT services provider to come out with a bigger price, Infosys decided to back-step at the last moment.
Though not as cash-rich as Infosys, HCL has a track-record of successfully chasing acquisition targets.
The deal is important for both firms. If HCL Tech is successful in acquiring Axon, it will be catapulted to the 12th position in terms of SAP implementation globally. If Infosys counters the bid successfully, it will emerge as the 10th largest SAP player, said Nishant Verma, VP, Tholons Capital.
