Netherlands-based Philips Electronics today announced it is selling its 69.5 % stake in medical transcription provider MedQuist Inc., of Mount Laurel, N.J., to CBay Systems Holdings for about $285 million.

Philips said it anticipates the sale to close during the third quarter.

MedQuist said it had received, but rejected proposals to sell up to 100 percent of the company to CBaySystems because the price that was offered was too low. Company execs said they had considered two proposals from CBaySystems involving the acquisition of 100 percent of MedQuist on the same terms as agreed with Philips, or up to 100 percent of the company. The deal would have granted minority MedQuist shareholders the option to sell their stake to CBaySystems or remain MedQuist shareholders.

After rejecting both offers, MedQuist said Philips opted to sell its stake.

In 2000, Philips paid $1.2 billion for a stake of about 60 percent in MedQuist. Later., it increased its holding to 70 percent.

In 2004, MedQuist was delisted after U.S. authorities began investigating whether it had violated laws in connection with the provision of medical transcription services. It has since paid damages to settle several lawsuits against it.

SNS Securities pointed out that the Philips statement did not address whether the sale would remove potential liability related to litigation, but it still welcomed the deal.