BIDDERS are circling Isoft, the embattled software firm at the centre of the National Health Service’s multi-billion- pound IT upgrade programme.

Health-industry sources said last night that BT and CSC, the American computer giant, were both looking over the company, although it was not clear whether either would bid.

Both have big contracts under the NHS programme, to which Isoft is a key supplier. It is the software subcontractor in three of the five regional “clusters” under which the IT revamp is organised. Last week Isoft cemented an important additional supply deal with CSC.

But Connecting for Health, the agency running the NHS programme, might take a dim view if either group decided to make a play for Isoft.

“They are not particularly keen on the idea of a reduction in the number of suppliers to the programme, or in vertical integration between prime contractors and their suppliers, particularly when it involves such a key player as Isoft,” said one health-industry source.

John Weston, Isoft’s chairman and acting chief executive, said on Friday that over the past few months he had received several unsolicited indications of interest in buying part or all of the company. “But there has been nothing that amounted to a firm offer,” he said.

Weston has bought Isoft a respite by negotiating extra funding from its banks. The new loan arrangement was disclosed on Friday, when Isoft published a delayed set of results that included a huge goodwill writedown that pushed it to a £343m pre-tax loss.

If Isoft had not published its results last week, it would have risked having its shares suspended. It was not able to give any trading outlook for the coming year.

The company has admitted accounting irregularities, and is the subject of a Financial Services Authority (FSA) investigation over potentially misleading statements to the market.

Weston told The Sunday Times it had been the decision of the company’s directors to call in the FSA after an internal investigation of the accounting problems. “We decided there was sufficient evidence to ask them to get involved,” he said.

He said he was close to appointing a new chief executive to run the company. “I have a good list of candidates,” he said.

Deloitte, Isoft’s new auditor, has included several qualifications in giving its opinion on the accounts. They relate to the previous irregularities, and the company’s subsequent decision to change its accounting policies.

Meanwhile, Accenture, another leading player in the NHS IT scheme, is understood to be in talks to renegotiate the terms of its contracts.

It is the prime contractor for the east and northeast NHS regions and has already made a £250m provision against losses on the contracts.

One health-industry source said last night the consulting firm had considered walking away from the programme, but that talks were continuing with Connecting for Health.

If Accenture were to withdraw, it would be a crippling blow for the £6.2 billion IT programme, which has been heavily criticised for delays and cost overruns in the past.

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