2007

1 June 2007

iSOFT-IBA merger – CSC consent issue

iSOFT and IBA today issued a joint statement on their progress in obtaining consent from CSC to the change in control of iSOFT that would result from the merger of iSOFT and IBA. iSOFT is issuing this statement in order to give its shareholders further background to the situation and the actions that it is taking.

Following detailed discussions over several months involving IBA, iSOFT and CSC, on 20 April 2007, CSC indicated in writing to iSOFT that, subject to certain conditions, CSC did not intend to withhold its consent. Prior to the announcement of the IBA offer, CSC indicated issues with regard to IBA as an acquiror of iSOFT, but subsequently agreed to the wording of the explanation of the CSC consent condition set out in IBA’s formal offer announcement issued on 15 May 2007.

CSC has previously indicated the criteria that it wishes to apply in considering whether to consent. These include the extent to which CSC believes the transaction will improve iSOFT’s ability to deliver its obligations to CSC under the National Programme for IT (“NPfIT”). Whilst this is not a test required by the contract between iSOFT and CSC (the “Contract”), the Board of iSOFT believes that the merged iSOFT / IBA would be better placed to perform the obligations as CSC’s subcontractor under NPfIT due to the increased financial stability and additional development resources that the merged organisation would enjoy.

Separately, there is an ongoing discussion between iSOFT and CSC in relation to the management of iSOFT’s work on the NPfIT programme. In summary, CSC has made it clear it wishes to take a greater role therein and, subject to agreeing an appropriate commercial framework, iSOFT has indicated that it is prepared to agree to this. Shareholders will, however, be aware that the existing agreement with CSC allows them to “step in” to the management of the Contract without iSOFT’s consent in certain circumstances. Whilst this would be an event of default under iSOFT’s banking agreements and one that the Board of iSOFT would regard as an unwelcome act, the ongoing financial impact on iSOFT would depend, inter alia, on CSC’s conduct of the programme thereafter and there are circumstances in which at best this could be largely neutral. In any event, the Board of iSOFT regards this as a commercial discussion between it and CSC that is separate from the consent condition although, for the reasons outlined above, the Board believes that the IBA merger can only enhance iSOFT’s support for CSC on the Contract.

On 28 May 2007, CSC indicated in writing that it did not intend to consent. This came as a surprise to the Board of iSOFT who had believed that the matter was still under consideration. iSOFT immediately announced CSC’s decision to the market and this was confirmed in an announcement by CSC on 30 May 2007.

The iSOFT board does not believe that CSC has given any satisfactory explanation as to why its intentions have changed since its letter of 20 April 2007. The Contract requires CSC not to unreasonably withhold or delay its consent. In these circumstances, iSOFT has been advised that there is a reasonable basis for arguing in a Court of law that CSC has unreasonably withheld and / or delayed its consent.

iSOFT is also concerned that CSC’s wider interests may be influencing its conduct on this matter.

CSC has been considering a possible offer for iSOFT since November 2006, when it was formally given access to a data room containing information on iSOFT for this purpose. More recently, iSOFT understands that CSC has also been considering a possible offer structure for iSOFT that could involve the Californian based private equity fund Gores. No firm offer from either CSC or Gores has been forthcoming to date and there can be no certainty that any offer will be forthcoming or as to the terms on which an offer might be made. In the week beginning 21 May 2007, CSC approached iSOFT’s financing banks to explore whether it could purchase iSOFT’s debt. This approach was made without the knowledge of iSOFT and CSC has not, in iSOFT’s view, provided a satisfactory explanation for this approach.

Against this background, 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. The objective of these proceedings is to ensure that CSC does not unlawfully withhold consent to a transaction that in the view of the iSOFT Board, inter alia, places iSOFT in a stronger position to discharge its obligations under NPfIT.

Notwithstanding this development, iSOFT intends to continue to work constructively with CSC to deliver the NPfIT contract, which remains an absolute priority for iSOFT. We also intend separately to continue the dialogue with CSC on the ongoing management of the programme.

A further announcement will be made in due course.

For further information, please contact:

John White

Director of Corporate Communications

iSOFT Group plc

Tel: +44 (0) 1925 283 423

Fax: +44 (0) 870 050 8911