The troubled software firm iSoft said today that its key partner in the £2 billion NHS IT upgrade, the American firm CSC, has approached iSoft's banks over the possible purchase of its debt, and was considering a tie-up with Gores, the US private equity firm, over a bid for the company.

ISoft also said that it would start legal proceedings against CSC for blocking a recommended £140 million bid from IBA Health, the Australian healthcare provider, which was aimed at securing its future.

Shares in the company climbed more than 3 per cent in morning trading to 45.5p.

The move raises concerns of a conflict between CSC’s intentions towards iSoft, and its role as one of iSoft's largest customers in the NHS infrastructure program.

BACKGROUND

• ISoft merger back on course

• CSC prepared to offer cash for iSoft

• CSC 'to counterbid for iSoft' says NHS supplier

• Problems at Isoft are far from over

• Sparks fly between ISoft and CSC

ISoft comment: The hardline

ISoft is considering legal action against CSC over its attempt to block a sale to IBA. Read the comment here.

Related Internet Links

• ISoft company information

• ISoft share price chart

• ISoft forecasts

Related Links

• Trouble for iSoft as CSC blocks Australia sale

• iSoft slumps as takeover deal blocked

“It is with regret that the board of iSoft feels it has no alternative but now to initiate proceedings against CSC to protect the company and its shareholders' position,” iSoft said in a statement.

"The objective of these proceedings is to ensure that CSC doesn't unlawfully withold consent to a transaction that in the view of the iSoft board ... places iSoft in a stronger position to discharge its obligations under [the NHS’s] National Program for IT."

It comes a week after CSC, iSoft's biggest customer under the £2 billion NHS contract, said that it would block a takeover by IBA Health because of the impact a deal could have with CSC's contract with the NHS.

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