HCL Technologies, as was rumoured, made its move to acquire Axon Global, spoiling Infosys’ party mood. The Delhi-based IT company has launched a counter-bid for Axon Global, which will make Axon shareholders happy, but also ups the acquisition cost for Infosys. HCL’s initial bid of 650 pence a share, through its UK-subsidiary HCL EAS, is just an invitation to start a bidding war. With just an 8.3% premium to Infy’s offer price, Infosys will most certainly make a counter-bid.
M&A
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Infosys’ Axon acquisition: boosting its consulting business or simply buying growth?
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Finally, Infosys Technologies did it. For years, one has got tired of hearing that the company was waiting for the right acquisition at the right price. This despite having oodles of cash on its balance sheet that lowered its return on capital. It did make some small acquisitions but nothing which made analysts furiously rework their estimates.
This will be a large acquisition by its standard, it will pay about Rs 3,300 crore to acquire UK’s Axon Group, a business transformation service provider.
First impression
Filed under: Companies, Top News, Axon, Infosys, M&A
Novelis to restate financials, Hindalco’s results may get affected too
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Restatement of accounts is quite uncommon in India. Even if Indian companies discover bloopers they are either rectified prospectively in the P&L or retrospective effect is given through the balance sheet. The first practice will reflect in future financial statements and the second will not reflect in the profit and loss account, thereby not affecting the profit for the year. US GAAP in contrast requires companies to restate their financial statements.
Filed under: Companies, News Analysis, Hindalco, M&A, Novelis, Restatement
HP-EDS deal: are Mphasis shareholders jumping the gun?
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Update on May 22: EDS has sent a clarificatory letter to the stock exchanges stating that it is not required to make an open offer, under Sebi’s existing regulations. That will disappoint retail shareholders who were hoping for a windfall, though instutional shareholders would have realised that an open offer was not on the cards. Read the text of the letter here.
Filed under: Companies, Top News, Companies International, EDS, HP, M&A, Mphasis, Open Offer
Is Bolix a good buy for Berger Paints?
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Berger Paints will add about Rs 180 crore or about 13% to its existing turnover after the acquisition of Polish company Bolix. Berger bought out the company on April 28, 2008 giving an exit to private equity company, Advent International.
Bolix is in the exterior building materials business; it makes external insulation finishing systems (EIFS). It was acquired by Advent in 2003 when it had a turnover of $26mn, which has grown at a CAGR of 15% to $45.5mn in 2007. That is a smart growth rate, indicative of the demand for this business.
Filed under: Companies, Paints, Top News, Berger, Bolix, Companies International, M&A
Tata Group’s Indian Hotels makes hostile bid for Orient-Express Hotels
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Hostile takeover bids are rare in India but its entrepreneurs are not loath to fight a pitched battle in international markets. The Tata group’s acquisition of a 10% stake in Orient-Express Hotels through Indian Hotels seems to be more than just an investment.
Filed under: Companies, News Analysis, Companies International, Hostile Takeovers, Indian Hotels, M&A, Orient Express
Reliance Industries buys out the Gapco group in East Africa
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Reliance Industries acquired the petroleum marketing operations of Gapco (Gulf Africa Petroleum Corporation). The acquisition has been done through a subsidiary and Reliance has not disclosed the consideration for the deal. Gapco owns a distribution network including retail outlets in countries like Tanzania, Uganda and Kenya. The company imports fuel and then supplies it to various consumers. Reliance would obviously seek to export its own fuel products through Gapco, boosting its retail margins. Continue Reading →