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IBA deal to buy iSoft in disarray as CSC objects

IBA said Computer Sciences Corp, one of the major contractors for a 12 billion pound ($23.8 billion) project for Britain’s public health service, had withheld its support for the takeover, which is vital for the deal to go ahead.

Healthcare software firm iSoft is sub-contracted to CSC, which must agree to any significant change in iSoft’s ownership.

‘ISoft has received a notification from Computer Sciences Corporation that it does not intend to give the consent to the change of control in iSoft,’ the British firm said in a statement.

Shares in IBA fell 2.2 percent on Tuesday to A$1.13 before a 48-hour trading halt was imposed. Shares in iSoft, which faces possible administration if it can not find a buyer, were down 19.2 percent at 41 pence, after earlier falling as low as 38p.

‘We need to go back to iSoft and CSC and seek clarification as to what the issues are and how we work our way through,’ said IBA spokesman Greg King, adding that the letter gave no further explanation or reason for CSC’s position.

A spokesman for IBA in London expressed surprise at CSC’s decision, saying the firm had to be consulted all the way through the process. He added that IBA would look at possible legal action if the problems could not be worked out.

IBA agreed to buy iSoft earlier this month to create what it said would be the largest healthcare information technology provider outside the United States. The offer is also subject to shareholder approval.

King said that, under the agreement between CSC and iSoft, CSC cannot unreasonably withhold its consent, and that the onus was on CSC to prove its concerns were reasonable.

‘At this point in time, both iSoft and IBA believe there’s no basis for unreasonably withholding consent,’ he said.

A spokeswoman for CSC said the firm was working on a statement to lay out its reasoning.