Exclusive: Blackstone in lead for Allscripts, deal uncertain

Fri Nov 30, 2012 3:14pm EST
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By Soyoung Kim and Greg Roumeliotis

NEW YORK (Reuters) - Blackstone Group LP (BX.N: Quote) has emerged as the frontrunner in an auction for Allscripts Healthcare Solutions Inc (MDRX.O: Quote), but the companies remain far apart on price and a deal is highly uncertain, people familiar with the matter said.

Blackstone has prevailed over rival private equity suitors Carlyle Group LP (CG.O: Quote) and TPG Capital Management LP TPG.UL in the battle for Allscripts, a healthcare technology company with a market value of about $2 billion, three sources said this week.

But Blackstone is skeptical about a deal, given the high premium sought by Allscripts and challenges facing the company, the sources said.

Shares of Allscripts fell 11 percent to $11.05 on the Nasdaq on Friday. The shares closed at $10.88 on September 27, the day before news of a potential sale emerged.

Sources told Reuters earlier this month that Blackstone, Carlyle and TPG had made second-round bids for Allscripts.

The sources who identified Blackstone as the frontrunner in the auction asked not to be identified because the matter is not public. Allscripts, TPG, Blackstone and Carlyle declined to comment.

Allscripts said on November 8 that it was evaluating strategic alternatives, following potential buyout interest, and that it had enlisted Citigroup Inc (C.N: Quote) to assist with the process.

But the auction process proved challenging, with interested parties concerned about Allscripts' declining earnings and market-share losses to larger rivals, such as Cerner Corp (CERN.O: Quote), people familiar with the matter have said.   Continued...