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iSoft in takeover talks

Graeme Wearden ZDNet.co.uk

Published: 17 Oct 2006 15:45 BST

Troubled UK software company iSoft has put itself up for sale, as further doubts emerge about its ability to deliver on commitments to the NHS IT upgrade.

iSoft announced on Tuesday morning that it is in talks with a number of potential buyers who are interested in either forming an alliance with the firm or buying it outright.

"In recent months the board has received expressions of interest from a number of parties interested in acquiring iSoft, taking a large shareholding in iSoft or creating a significant strategic alliance with the company," said company chairman John Weston.

"The board has concluded that shareholders' interests are best served by opening discussions with a number of these parties with the objective of clarifying the options and determining the most appropriate route forward for the company and its shareholders," Weston continued.

Weston also admitted that iSoft expected to make up to 15 percent less revenue this year than it made last year.

The company's shares briefly surged on news of the talks, rising from 55p to over 61p, but quickly slipped to 53p as the markets digested Weston's statement. iSoft is holding its AGM in Manchester on Tuesday afternoon.

iSoft has been subcontracted to provide software for the multi-billion pound NHS IT upgrade. However, there is growing concern over its ability to deliver its Lorenzo package.

Lorenzo is meant to underpin the NHS' electronic clinical records system. In August, a leaked report revealed that Accenture and CSC — lead contractors in the NHS project, both of which subcontracted iSoft — doubted whether Lorenzo would be delivered on time and working.

Accenture pulled out of the project shortly afterwards, and its responsibilities were handed to CSC.

On Tuesday morning, the Guardian reported that the NHS was about to miss its target to get Lorenzo installed at 20 acute trusts by the end of the month.

iSoft has also been dogged by reports of financial mismanagement. Its accounts are currently being investigated by the Financial Services Authority.