iSoft said today it has started legal action over CSC's refusal to consent to its takeover by Aussie health provider IBA Health.

CSC, as the main contractor installing iSoft's products, had the right to object to management changes at iSoft, but iSoft believes its objections are unreasonable.

The company said CSC agreed in writing to consent to the takeover on 20 April, subject to certain conditions. But by 28 May CSC had changed its mind and said it would block the rescue package.

In a joint statement from IBA Health and iSoft, the companies said they had been advised that CSC's refusal to consent to the takeover could be considered unreasonable and therefore rejected by a court.

The statement also said: "CSC's wider interests may be influencing its conduct on this matter."

CSC has been considering a takeover bid of its own for iSoft since November 2006. iSoft further claims that CSC has been talking to US private equity group Gores to help with funding such a takeover.

In late May, CSC approached iSoft's bankers, without telling iSoft, to discuss buying the company's debt.

The statement says: "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."

CSC declined to comment on this story.

The full iSoft statement is available here. ®