Mount Laurel-based medical transcription service MedQuist Inc. announced today that Koninklijke Philips Electronics N.V., MedQuist's majority shareholder, had reached an agreement to sell its approximately 69.5 percent ownership interest to CBaySystems Holdings Ltd. for $11 a share.

CBaySystems Holdings, a holding company with a portfolio of investments in medical transcription, health-care technology, and health-care financial services, has headquarters in Annapolis, Md., and Atlanta and trades on the London Stock Exchange's AIM.

The sale of Philips' stake in MedQuist is expected to close during the third quarter of 2008.

Philips, which had a majority share in the company since 2000, will receive a combination of cash and a promissory note equaling about $7.50 a share (minus any MedQuist cash dividend paid prior to closing). The remaining per share consideration of approximately $3.50 per share will be paid to Philips in the form of a seven-year bond convertible into common shares of CBaySystems Holdings.

According to the MedQuist release, it will continue to operate as an independent company with its own executive leadership, under the financial oversight of the holding company.

MedQuist, which employs more than 7,500 people, was the subject of several federal probes in 2003 after an employee alleged that the company had improperly billed and overcharged some customers.

MedQuist was priced at $8.25 in late-morning over-the-counter trading, up $0.75 from yesterday's close. Philips was trading at $38.59 on the New York Stock Exchange, up $0.09 from yesterday's close.