OFT sows confusion over iSoft merger

The Office of Fair Trading sowed mass confusion in the financial markets yesterday by first appearing to refer a takeover to the Competition Commission and then giving the deal the all-clear.

The Office of Fair Trading sowed mass confusion in the financial markets yesterday by first appearing to refer a takeover to the Competition Commission and then giving the deal the all-clear.

Shares in iSoft, the company involved, plunged by 10 per cent before recovering later to end the day 20p higher at 340p.

At 3pm, the OFT issued a stock exchange merger update stating that it had decided "on the information currently available to it" that it would refer the completed £700m merger of iSoft and a rival healthcare software group, Torex, "unless acceptable undertakings in lieu of a reference can be negotiated".

As the decision flashed up on screens around the City, iSoft shares fell. However, at 4.50pm, the OFT issued another statement saying the acquisition would not be referred "if iSoft gives suitable undertakings to address the competition concerns arising from the merger", which iSoft had indicated it would do.

The OFT cleared the merger last year but was then ordered by the Competition Appeal Tribunal to review its decision.

An OFT spokeswoman said last night that it had to use statutory wording in its stock exchange announcements but that the issue would be examined by its mergers team.