ISoft talks with preferred buyer on hold - paper

LONDON, Feb 14 (Reuters) - Talks between the preferred buyer of iSoft Group Plc IOT.L and the British software firm have been put on hold, casting a shadow over the 200-million-pound ($388 million) sale of the company, the Times reported on Wednesday.

U.S. drug wholesaler McKesson Corp. (MCK.N) was understood to be front-runner but talks with iSoft's key contractor had broken down over contract conditions, the British newspaper said.

"McKesson would be the best buyer because they're a cash bidder, but they would have to be persuaded to drop all their current demands," a source close to the sale was quoted as saying. "Until they do that they've been told that they're not going forward."

Computer Sciences Corp. (CSC.N) sub-contracts work to iSoft from Britain's National Health Service.

A comment was not immediately available from iSoft or McKesson. ($1=.5153 Pound)