The Hindu Business Line : Axon posts HCL scheme document; voting on Nov 24

New Delhi, Oct. 25 HCL Technologies has moved a step closer to its £441-million acquisition target, with the UK-based Axon Group posting the HCL scheme document and fixing November 24 as the date for shareholders to vote on the Indian IT company’s 650 pence a share offer.

According to the schedule revealed in the document, while the HCL court meeting and the HCL general meeting would take place on November 24, the effective date for the transaction has been fixed for December 15, to be followed by de-listing of the shares a day later.

The document includes a letter of recommendation by Axon Chairman for the HCL bid. Axon directors who hold 1.47 lakh shares (0.2 per cent) of the company have indicated their intention to enter into ‘irrevocable undertakings’ with HCL EAS to vote in favour of the HCL scheme, after being ‘released’ from the terms of the irrevocable undertakings given in connection with the earlier Infosys offer. While the scheme document does not mention a similar ‘irrevocable undertaking’ by Axon founders — who hold 17.9 per cent in the company — sources clarified that the founders too were backing the HCL deal.

When contacted, an HCL spokesperson said the company would approach the directors and founders for an irrevocable undertaking once the Infosys’ agreement terminated. “The current irrevocables in place are due to lapse upon termination of the Infosys Implementation Agreement on Monday. At that point we will approach the directors and founders with a view to having them sign an irrevocable undertaking in our favour.”

According to the document, Axon has committed that it would not agree to any work fee, inducement fee or break fee or other similar arrangement with any party other than HCL Technologies.

Until the HCL acquisition lapses or is withdrawn, Axon has agreed that it will not solicit, encourage or seek to procure a competing proposal. Axon has undertaken not to vary or amend its recommendation of the HCL Acquisition for a period of 60 hours after notifying HCL EAS of a competing proposal.

HCL has tied up £400 million loan from Standard Chartered, to part-fund the deal.

Infosys had offered £407 million offer for Axon in August. However, HCL Technologies trumped that bid with an offer that was an eight per cent premium over Infosys’ . The Axon board, which initially backed the Infosys’ bid, withdrew its recommendation and supported HCL’s offer .

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Axon posts HCL scheme document; voting on Nov 24