BANGALORE, INDIA: Shareholders of the British-based Axon Group plc, at an extraordinary general meeting (EGM) held in London, approved the acquisition of their SAP consulting firm by India's fifth largest IT bellwether HCL Technologies Ltd.

The Delhi-based HCL informed the Bombay Stock Exchange (BSE) that a London court had also cleared the scheme of arrangement to implement the acquisition by its subsidiary HCL EAS Ltd at a meeting held prior to the EGM.

Vineet Nayar, chief executive, HCL, said: "Axon investors by majority (99.9 percent) accepted our cash offer of 650 pence ($9.78) per share. The deal will be finalised after the court approval on Dec 15."

Axon is also expected to hold its annual general meeting on Dec 15 to endorse the court approval and finalise the buy-out.

In a dramatic move a month after Infosys Technologies Ltd bid for Axon at 600 pence per share on Aug 25, HCL on Sep 26 edged out the former by offering a premium of 8.3 percent (650 pence) per share.

In value terms, HCL offered to pay 441 million pounds ($662 million) for 34.7 million shares of Axon in an all-cash deal as against 407 million pounds ($610 million) by Infosys. Infosys, however, pulled out of the deal in mid-October after its board felt the HCL counter-bid was over-priced and beyond its strategic offer price.

'The deal is significantly more attractive to us today than it was yesterday. In fact, we bought 10.43 percent of Axon shares in October from the open market at less than the offer price (650 pence),' Nayar added in an oblique reference to the impact of global recession and financial meltdown on stock prices in the equity markets worldwide.

Admitting that there could yet be another bidder for Axon between now and Dec 15, Nayar said the company was taking strategic steps to ensure it remained strong in the race till the deal was clinched.

'There is a distinct possibility of a counter-bid anytime over the next two-three weeks because of the competitive environment and valuations declining in a downturn. Potential investors look for such assets keeping in view the long-term prospects of deals,' Nayar said.

Due to currency fluctuations, the value of the deal has gone down the offer price (441 million pounds).

'Outlook for the company is positive and it is on a healthy course in meeting its guidance. The slowdown will not change Axon's good track record,' Nayar asserted.

Source: PR Wire