Infosys target Axon may invite rival bids from Fujitsu, NTTSoft, HCL

Seems like Infosys' preferred acquisition target SAP consultancy Axon has several interested suitors. Not only is the software giant facing domestic opposition in the form of Shiv Nadar-led HCL Technologies, two Japanese behemoths in the form of Fujitsu Software and NTTSoft may also put in counter-bids to Infosys' 600 pence-a-share offer worth $753 million. (See: Infosys to acquire UK's Axon for $753 million)

While the $18-billion Fujitsu was earlier in the fray to acquire Axon, NTTSoft was keen on SAP assets in Europe. HCL may even be willing up to pony up 690 pence per share of the company, according to some sources. Any competing bid to Infosys' offer, announced on 25 August, could come as early as next week.

Fujitsu, it is believed, turned away from deal making after the Axon management persisted with asking valuation of 700 pence, but later saw Infosys striking a deal at 600 pence. However, some analysts argue that overseas players, especially Japanese software firms, may not be able to squeeze out anything significant from an expensive counter offer. Unlike Infosys, neither NTT nor Fujitsu will be able to drive up operating margins through offshoring given the expensive workforce back home.

However, such speculation is not new. Only a day after Infosys made its interest public, shares of Axon had zoomed on rumours of a counter offer. If Infosys succeeds, the deal would be the largest overseas acquisition by an Indian IT services firm. (See: Counterbid rumours boost Axon shares by 21 per cent, Infosys pares gains)

At the same time, Infosys expressed confidence in its bid and insisted that there was no rival offer. "We are confident that our bid will go through, because we believe it is a fair valuation, and we have got the support from the board and management of Axon,'' said Infosys CEO Gopalakrishnan.

"As for any rival bids, nothing officially has been communicated to us at this point. We expect the (acquisition) process to be completed by the end of November," added Gopalakrishnan, who was in Singapore for the Forbes Global CEO conference.