HCL threatens Infosys bid for Axon

Axon said it will consider new offer

HCL has topped Infosys' offer for Axon

Offshore outsourcing providers HCL Technologies and Infosys are now competing to acquire UK SAP consultancy Axon Group.

HCL has topped Infosys' previous offer, made in August 2008, of £407.1m with a new offer £444.1m. If the acquisition goes ahead it will be the largest ever by an Indian IT company overseas.

HCL chief executive Vineet Nayer said in a call to discuss the offer: "The [Axon] Group's management signed an inducement-free contract a few minutes ago. " He added later that "the contract shows [Axon is] happy to go forward and consider our offer".

Infosys will not comment on the rival bid. When the firm first made its own offer for Axon, it said it was expecting the deal to be closed around November this year. HCL has now said that it would not expect its offer to close until 2009.

"It will be a long process ... which may happen or it may not," said Nayer. "We will just focus on what we need to do and not think about anything else."

Nayer added that HCL made a higher bid for the consultancy than Infosys because "it is what we believe Axon is worth".

He explained that HCL acquires companies in order to get into new vertical markets, adding that Axon will be easy to integrate with HCL because it also has a strong presence and head count in the UK.

Ram Krishna, corporate vice president for enterprise application services at HCL, pointed to the strong interaction between HCL and Axon dating back to July 2008.