iSoft poised for auction

NHS software group iSoft is poised to initiate an auction process in an effort to settle a long-running takeover saga, it emerged today.

The group will take the step if Germany’s CompuGroup ups its offer in response to a new proposal worth £166.3m (€246m) from rival IBA Health of Australia.

Isoft has been looking for a buyer since it ran into delays and cost overruns with the NHS software programme, known as the National Programme for IT (NPfIT).

The company has issued profits warnings as a result of the delays to the programme and last August posted annual losses of £382.2m (€565m).

IBA Health made its first bid proposal at £132.3m (€196m) in May, but has now improved this after Germany’s CompuGroup offered £160m (€237m) last month.

Isoft said shareholder meetings scheduled for August 31 in respect of the CompuGroup offer had been adjourned. It has also contacted the Takeover Panel to consider the terms of an auction procedure.

It added: “If the competitive situation continues to exist, the board expects the Panel to announce the terms and timing of such a procedure in due course.

“The board will make its views on the CompuGroup and IBA offers known to shareholders following resolution of the competitive situation between them.”

IBA Health, which has 25 years’ experience in healthcare software, said the combination with iSoft would create one of the largest providers of information systems in the healthcare IT market with a combined installed base of around 13,000 systems.

Koblenz-based CompuGroup is interested in iSoft because it wants to expand its position in the health software sector.

The company has around 1,500 staff in nine countries. Last year the firm posted revenues of €140m (£94.1m), with underlying earnings of €38.4m (£25.8m).

CompuGroup planned to sell parts of iSoft’s UK businesses working on a new £12bn (€17.7bn) NHS patient records database to US company Computer Sciences Corporation (CSC), the firm which subcontracts the NHS work to iSoft.