iSoft plays hard-to-get after Compugroup bid, makes IBA Health hike offer

Australia's largest e-health company, IBA Health, has raised its cash offer for British e-health software group iSoft to £166.3 million ($333.4 million), which it expects will scare off rival bidder CompuGroup of Germany.

If the bid is successful, the acquisition would make IBA the world's fourth-largest e-health group and the largest outside the US. IBA already holds more than 24 per cent of iSoft, which gives it bid a distinct advantage. The company expects a decision in its favour within two weeks.

CompuGroup had earlier trumped IBA's first bid with an all-cash offer of £160 million ($320.75 million), or 66 pence ($1.32) a share. IBA's new offer gives shareholders a choice; either 69p ($1.38) per share in cash or 1.65 IBA shares for every iSoft share, or a combination of both.

The scrip alternative represents an implied offer of 70.2p ($1.41) per share, based on IBA's 21 August share price of 92¢ (46p).

CompuGroup entered the fray five days before the UK High Court was to approve IBA's May deal, which had also secured the blessing of Computer Sciences Corp (CSC) that subcontracts work to iSoft on the £12 billion 'Lorenzo' patient database being developed for the UK's National Health Service. CSC can veto any change in ownership of iSoft.