IBA Health, the Australian software firm strongly tipped to take over iSoft, announced yesterday that it has been granted a trading halt for its shares by the Australian Securities Exchange (ASX) to discuss with investors an expected offer for the British company.
IBA Health said it was seeking to raise new equity capital of around A$200M (£83.2m) through an institutional placement and a rights issue to existing shareholders.
According to the Times newspaper the move comes ahead of IBA launching an expected £132.3m all-share bid for company iSoft.
In a statement on IBA’s website, the company said: “The trading halt is to enable IBA to hold meetings with certain institutional investors with a view to raising new equity capital to facilitate a possible recommended all-share offer for iSoft Group plc, listed in the UK. The iSoft management team is participating in these meetings.
“Under the proposed merger terms iSoft shareholders would receive 1.1 new IBA shares for each iSoft share. This would value iSoft at A$1.38 (56.9p) per share based on the latest trading price of IBA shares on the ASX.”
The company added that it has already secured A$315m (£131m) in debt facilities to be underwritten by the Dutch bank ABN Amro.
However IBA warned: “There can be no certainty that an offer by IBA to acquire iSoft will be made.”
If the deal goes ahead, IBA says it would produce the fourth largest healthcare information technology company, with full rate annual cost synergies totalling almost A$27m (£11.2m) in the year to 30 June 2009.
Last Monday (30 April), iSoft announced that takeover talks were ‘well advanced’ . The discussions have been ongoing since last October.
The company issued a series of profit warnings last year, mainly due to delays in the development of the Lorenzo system for the National Programme for IT. On Friday (4 May), the company announced that its chief technology officer, Ravi Kumar, principal technical architect for the clinical software was leaving the firm.
IBA shares have been suspended for four days, which could be extended for a further two days.