Axon, the UK IT services group, is set to fall into the hands of HCL Technologies after its Indian rival, Infosys Technologies (NASDAQ: INFY - News) , pulled out of the race.

Infosys had agreed a 600p a share bid with Axon, a specialist in providing consulting services based on business software created by Germany's SAP, in late August. However, it was trumped by a 650p-a-share offer from smaller rival HCL last month.

Many investors expected Infosys to return with a higher offer, pushing Axon shares as high as 685p.

However, after a heavy profits warnings from SAP on Monday, Infosys cut its profits forecast and opted not to increase its offer. Infosys blamed the current economic situation and the drastic depreciation of leading global currencies against the dollar for its shortfall.

The tussle had been seen as a landmark in India as it launched the biggest overseas acquisition by an Indian information technology outsourcing company. It followed speculation that India's fast-expanding computer services groups would use strong cash balances to make big acquisitions in Europe. Furthermore, contested deals in Indian business culture are rare.

Axon said a deal with an Indian group would give it the global scale and resources to offer other services, such as outsourcing, that it lacks.

As Infosys's original bid was by scheme of arrangement, an extraordinary meeting for Axon shareholders to approve this deal is scheduled for October 20, although it is unlikely to be passed.

HCL's bid is also via a scheme of arrangement and Axon will prepare the scheme document to be distributed to Axon shareholders around October 24.

"You can never say never but I'd be astonished if anyone else goes in now," said Jonathan Imlah, an analyst at Altium Securities.

"Take away the bid and the shares would probably be worth 300p," he said.

Shares in Axon closed down 41p at 610p.