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iSoft's Oz takeover gets shareholder thumbs-up
High Court hurdle last obstacle in IBA's way...

By Liam Tung

Published: Monday 08 October 2007

NHS software supplier iSoft's shareholders have "overwhelmingly" approved IBA Health's £166m takeover offer.

The deal offers iSoft shareholders 69p cash for each share, representing a 23 per cent premium on iSoft's closing mid-market share price on 16 October, according to Australia's IBA.

Investment company Allco Equity Partners (AEP) also announced it will support IBA with AU$300m (£133m) for a combination of shares and convertible notes which are to be issued by IBA.

To help refinance some of iSoft's debt and for working capital expenses, AEP will commit a further AU$62m (£27m). However, the final amount is contingent on whether iSoft shareholders decide to take cash or IBA shares.

Besides facing rising interest payments on its $93m debt, it was reported iSoft had been struggling to fulfil its contract to supply Lorenzo as part of the UK NHS' National Programme for IT. Accenture pulled out of the entire project last year after a leaked email claimed iSoft had "no believable plan" for the delivery of Lorenzo.

Gary Cohen, executive chairman of IBA Health said in a statement: "We can now move forward with our integration plans for the group creating one of the world's largest providers of health information technology solutions with operations throughout the regions from Europe through to Australasia."

IBA's initial offer to iSoft was destabilised in July by German company CompuGroup, which then announced it had already acquired 23.4 per cent of iSoft from its existing shareholders - some 56.6 million shares. The takeover will make IBA the world's fourth largest e-health group.

Implementation of IBA's revised offer still remains subject to the High Court of Justice for England and Wales, which must sanction IBA's proposed scheme, expected to take place on 25 October.

IBA's Cohen said: "IBA will release further information to the market after completion of the formal merger process which is expected to complete on 30 October."

Liam Tung writes for ZDNet Australia