Will CSC buy troubled iSOFT?

Renai LeMay
Wednesday, 30 March 2011 08:57

IT Industry - Strategy

With its share price continuing to plunge, last week iSOFT went into a trading halt, stating it wanted to halt its shares being traded ahead of an update on its long-running strategic review process. On Monday, iSOFT extended the halt, stating that 'proposals' it had received as part of the process were not sufficiently advanced to permit their disclosure to investors.

'Given the nature of proposals received, in the absense of a detailed announcement, there is potential for trading to take place in a speculative or uninformed market,' said iSOFT, noting that it wanted its shares to remain frozen until next Monday 4 April. However, several media outlets have speculated over the past 24 hours that iSOFT will be bought by CSC, which has a substantial Australian presence, including in the e-health arena.

'It's believed IT services giant CSC, which is iSoft's biggest customer, could finalise a more than $300m takeover deal for the company as early as today,' The Australian wrote this morning.

'Virginia-based CSC, listed in New York with a market value of US$7.5bn (£4.6bn), is now regarded as the most likely buyer for iSoft given their contractual ties across the Midlands and east and north of England, particularly in relation to the software group's controversial next-generation Lorenzo platform,' wrote The Guardian newspaper in the UK.

A CSC spokesperson said the company was 'unable to comment on any rumour or speculation relating to this matter', while an iSOFT spokesperson has not yet responded to a request for comment.