Probably the only other way to have had so many Australians read this blog yesterday (thanks to the FT and its excellent Alphaville) would have been to point out the attractive odds on shorting skipper Ricky Ponting in the forthcoming Cricket World Cup* (and then stand well clear). But first, a couple of additional, speculative observations regarding IBA Health.

Executive Chairman Gary Cohen is a deal maker; and this is a transaction he is keen to make. He’s come from a deal making company, Allco Finance Group, has the contacts to structure some sort of funding and (the balance of probability suggests) would not have publicly uttered as much as he has done if the funding was not ready. But it is hard to envisage much other than a paper deal involving significant iSoft asset sales; and convincing majority iSoft shareholders to go that way will take more than a silver tongue.

iSoft asset sales are, to this minority shareholder also, a seriously problematic part of the potential IBA deal – more so than the likelihood that the purchase would be paper-based. Why (in the presence, it still seems, of alternatives) should owners of 40% of an established market in the UK & Eire, plus a decent chunk of Germany’s, exchange some part of that stable 145 million person market for the political risk associated with many of IBA’s poorer emerging market countries? A complementary deal bears scrutiny, a substitutive (and essentially destructive) one less.

As an aside, based on information received (thanks, you know who you are), IBA may have the equivalent of a monopolies investigation to endure on their home turf if they acquire iSoft. The IT health market in Australia is not large in the grand scheme of things (21 million consumers), but it is fragmented. A monopolies referral – though a ponderable - might not, therefore, compel unexpected disposals.

* The 100pt line that Ponting ends the tournament as Australia’s top scorer is at 31-36, the shortest odds in the squad. Looks a decent bet since modern-great Ponting averages almost 42.5 runs in ODIs. However, his ODI average in the West Indies in a less stellar 26.4 runs. Course, that’s against the WI, not the likes of first round fodder the Netherlands and Scotland. And Ponting comes in at no. 3, so he will probably face them. Nonetheless, a little patience and resisting taking the under until the Super 8s stage might be interesting. Finding a hedge, though, would be sensible.

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1 comments

  1. Anonymous // 4/03/2007 11:41:00 PM

    Thers is little doubt chairman Gary Cohen is a deal maker; when at Allco Finance Group he learnt some interesting financial tricks such as triple depreciation across the continents.

    However, he needs to demonstrate that he understands the difference between a finance company and a product/service company.
    When your largest client (Ramsay Health with 60 hospitals in Australia) loses confidence and patience with your key product and services and replaces it with a competitor, and you fail to deliver on key technology projects, it looks like a very familiar story to the iSoft saga.
    The silver tongue has failed to convince Australian health authorities in either the public or private sector.

    The acquisition would send warning signals to health departments in Victoria, NSW, Tasmania and Queensland. They are already reeling from iSoft's financial and technical disaster within a monopolistic position they have inherited over time and poor management of a competitive environment. A competitive position Granger was determined to establish in Britain and the only legacy he will leave to the NHS.

    Cohen will just add to their woes.

    The NHS had better watch out. The ashes may have a new meaning for Britain after IBA bowlers plunder and pillage their legacy systems and revenue and brings Granger's vision and innings to a disaterous end. It will also handicap any real future healthcare reform within the NHS.

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