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Axon board withdraws Infosys recommendation

Posted by Yogesh on Friday, 3 October, 2008

The Axon board has withdrawn the Infosys offer recommendation. The board will unanimously recommend the HCL offer when it is made reports CNBC-TV18 quoting sources.

Infosys had offered 600 pence per share for Axon on August 25 and HCL tech had offered 650 pence per share for axon on September 26.

Earlier CNBC-TV18 had reported that the 60-hour deadline to Infosys to get back to Axon has expired. As it was previously estimated with Infosys, the deadline was only a safety precaution that the Indian IT major was entitled to under the earlier agreement. In that time period, the Axon board could not withdraw its recommendation to Infosys offer.

Once that deadline has passed, the Axon board is free to withdraw its recommendation of Infosys offer to its shareholders. But there is a caveat here. It does not mean that the Axon board will withdraw its recommendation. But given the offer that HCL has put forward to Axon is much higher – nearly 3.8% higher than Infosys – in all probability the board will side with the higher offer.

It is a pure cash deal; there are no shares to be exchanged. Therefore, the Axon shareholders just have to sell and get out of the company. The company will be delisted if the open offer or the Scheme of Arrangement goes through. Both the parties have a 1% inducement or break-up fee depending on which party you talk to. Source Moneycontrol

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