Wednesday April 1, 08:05 AM
UPDATE 2-UK watchdog says Capita may have to sell IBS
LONDON, April 1 (Reuters) - Britain's competition regulator ruled on Wednesday that back-office outsourcing group Capita Group Plc may have to sell all or part of IBS Opensystems (LSE: OPN.L
- news) , acquired last June.
The Competition Commission said the 77.7 million pound ($111.3 million) deal could damage competition in the market for the supply of revenue and benefits software to local authorities.
'We will now consult on appropriate ways to address the loss of competition, which could include a requirement for Capita to sell all or part of the acquired business,' said Christopher Clarke, chairman of the Competition Commission's inquiry group which looked at the issue.
The regulator said, however, the acquisition would not reduce competition in the market for social housing software, where there are more suppliers.
Capita, Britain's largest back-office outsourcer, said it would defend the acquisition and highlighted that the findings were provisional.
'Capita will continue to make its case to the Competition Commission in the continuing inquiry,' the company said in a statement.
Shares in Capita closed on Tuesday at 653.3 pence, valuing the FTSE 100 company at just over 4 billion pounds.
(Reporting by Victoria Bryan; Editing by David Holmes)
($1=.6981 Pound) Keywords: CAPITA/
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