Axon withdraws Infosys offer, accepts HCL’s
Axon, the British information technology company has decided to accept the HCL Technologies’ offer of $736 million paving its acquisition by the Indian firm.business Updated: Oct 02, 2008 22:16 IST
Axon, the British information technology company has decided to accept the HCL Technologies’ offer of $736 million paving its acquisition by the Indian firm.
Axon has withdrawn the recommendation of Infosys offer.“The board has withdrawn its recommendation on Infosys Offer and unanimously intends to recommend the HCL Offer when it is made,” said Axon.
As per the implementation agreement with Axon, Infosys had sixty hours to make a counter bid and that period has now lapsed.
HCL bid, which was at a premium of 8 per cent to Infosys bid, has been considered as a deal that is costly and would impact the balance sheet of the company in the short term.
Experts believe that Axon will have to take substantial debt from the market at a high rate to fund the debt along with utilising its cash reserves.
“HCL will have to raise debt from international markets at interest rates ranging between 8.5 per cent and 9 per cent per annum,” said Gaurav Dua, head of research at brokerage firm Sharekhan.
“The deal will impact keep the investors sentiment low for the short-term however the deal will prove beneficial in the long-term.”