November 2, 2007 / 7:55 AM / 10 years ago

Philips to sell MedQuist stake

AMSTERDAM (Reuters) - Philips Electronics (PHG.AS) said on Friday it will sell its 70 percent stake in medical transcription and document services provider MedQuist MEDQ.PK and take a fourth-quarter charge of 320 million euros ($461.6 million).

Philips said in a statement it would coordinate with MedQuist to auction its stake with all interested potential purchasers although it could not give any assurance on the structure of any transaction or whether a deal would take place.

It said the 320 million euro loss would be presented under discontinued operations and took into account cumulative translation differences related to Philips’ dollar-denominated investment in MedQuist accumulated under equity.

It said the recognition of the MedQuist loss would not affect Philips’ equity.

Philips said in July it was reviewing its options for its MedQuist stake after deciding it was a non-core holding and said it would take a 35 million euro second-quarter impairment charge on its stake. Then, an analyst estimated the value of the stake at about 183 million euros.

Philips paid $1.2 billion for a stake of about 60 percent in Medquist in 2000, and later increased its holding to 70 percent.

MedQuist said last month it planned to apply to re-list on the Nasdaq after filing its second-quarter results with the U.S. Securities and Exchange Commission.

    It was delisted in 2004 after the U.S. authorities launched an investigation into whether the company violated laws in connection with the provision of medical transcription services.

    In March, the company agreed to pay $7.75 million to settle a class action case brought by shareholders who accused it of issuing misleading statement that inflated the stock price. It did not admit liability in the settlement.

    Philips is the world’s biggest lighting maker, a top three

    hospital equipment maker and Europe’s biggest consumer electronics producer. Its shares closed at 28.72 euros on Thursday.

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