UPDATE 2-Axon drops Infosys bid in favour of HCL

(Adds analyst comment, share price)

LONDON, Oct 2 (Reuters) - British software firm Axon Group Plc AXO.L is dropping its recommendation of a takeover bid from India's Infosys Technologies in favour of a higher offer from HCL Technologies (HCLT.BO), Axon said on Thursday.

Infosys (INFY.BO), however, is widely expected to raise its offer and is seen by analysts as having the most synergies with Axon.

Infosys's 600 pence per share, or 407 million pound ($719.9 million), bid for Axon was last week trumped by rival HCL's cash offer of 650 pence per share or 441.1 million pounds.

By 0725 GMT, Axon shares fell by 1 percent to 668.5 pence per share.

Simon Strong, an analyst at KBC Peel Hunt, said Infosys was the best partner for Axon because it was a much bigger business with international reach and greater inroads into larger clients.

He said Infosys was likely to raise its offer and saw 700 pence as a likely offer price.

Piper Jaffray also said in a note to clients it expected a counter bid, and said any price over 700 pence would be good value.

Axon said it gave Infosys 60 hours to mull over the higher HCL offer before it shifted its recommendation.

Axon said it was pleased that HCL, with which it has had a long-standing relationship, has "recognised the quality of the Axon business". (Reporting by Ben Deighton; Editing by Erica Billingham, Paul Bolding)