IBA to ask for review of OFT decision on iSoft Torex deal

IBA says that it intends to lodge its application with the Competition Appeal Tribunal within the next seven days.

On 7 November the OFT announced that it would not refer the proposed merger between iSoft and Torex to the Competition Committee.  The OFT attached no conditions on the merger.

Earlier this month IBA filed a separate claim in the High Court against Christopher Moore, chairman of Torex, for more than £50,000 alleging he breached his ‘fiduciary duty’ and had improperly used confidential information while he was a member of its board from May to August 2003.

Torex confirmed that Moore, had been served with legal proceedings by IBA Health Limited (“IBA”) alleging breach of fiduciary duty and improper use of confidential information by Mr Moore, and that IBA were seeking an injunction against Mr Moore restraining him from participating in any company resulting from the proposed merger between Torex and iSoft.

A holding statement issued by Torex said: “Mr Moore and Torex are firmly of the belief that there is no substance in the claims brought against Mr Moore by IBA. In particular, having taken advice from leading counsel, Mr Moore and Torex believe that it is unlikely that IBA would be able to obtain an injunction to prevent Mr Moore from participating in any member of the merged group.”

In March 2003 IBA and Torex signed an agreement for a Torex wholly owned company, Torex Medical Systems, to distribute IBA’s products in the UK.  Under the deal, Moore became a director of IBA and Torex acquired an eight per cent stake in IBA.

However, in July Torex announced it would seek a merger with iSoft, one of IBA’s major competitors, particularly in the Australia and Asian markets.

IBA alleges Moore failed to serve the interests of IBA shareholders while he was a director of IBA, since, as chairman of Torex, he was also negotiating its merger with iSoft, a direct competitor of IBA.  Moore resigned from the IBA Board in August 2003.

IBA further asserts that Moore has received confidential information. IBA says it is therefore seeking an injunction to prevent Mr Moore playing any further role in the merger between Torex and iSoft, together with an account of profits that he may receive from the merger.