SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 7)
MedQuist Inc.
(Name of Issuer)
Common Stock, No Par Value
(Title of Class of Securities)
584949101
(CUSIP Number)
Neil T. Anderson, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004-2498
(212) 558-4000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 21, 2008
(Date of Event which Requires Filing of this Statement)
If a filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box [ ].
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CUSIP NO.584949101
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1. NAME OF REPORTING PERSON
Koninklijke Philips Electronics N.V.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
222531298
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
The Netherlands
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7. SOLE VOTING POWER
26,085,086
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NUMBER OF 8. SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -----------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON 26,085,086
WITH -----------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,085,086
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
69.5%
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14. TYPE OF REPORTING PERSON
CO
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Item 1. Security and Issuer.
This Amendment No. 7 relates to the common stock, no par value (the
"Shares") of MedQuist Inc., a New Jersey corporation. This Amendment No. 7
amends and supplements Item 4, Item 5, Item 6 and Item 7 of the Statement on
Schedule 13D dated June 6, 2000 (the "Schedule 13D") filed by Koninklijke
Philips Electronics N.V., a corporation incorporated under the laws of The
Netherlands ("Philips"), as previously amended and supplemented by Amendment No.
1 to the Schedule 13D, dated July 28, 2000, Amendment No. 2 to the Schedule 13D,
dated August 2, 2000, Amendment No. 3 to the Schedule 13D, dated August 24,
2000, Amendment No. 4 to the Schedule 13D, dated July 6, 2007, Amendment No. 5
to the Schedule 13D, dated November 2, 2007, and Amendment No. 6 to the Schedule
13D, dated November 8, 2007. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings ascribed to them in the Schedule 13D.
Item 4. Purpose of the Transaction.
Item 4 is hereby amended and supplemented as follows:
Following a public announcement on July 6, 2007 that it viewed its stake in
MedQuist as a non-core holding and a subsequent public announcement on November
2, 2007 of its decision to sell its ownership interest in MedQuist (the "Philips
Shares"), Philips has collaborated with MedQuist in pursuing a possible sale of
the Philips Shares in a transaction in which, if it had been approved by the
board of directors of MedQuist, the other shareholders of MedQuist would have
received or would have been offered the same consideration as Philips received
for the Philips Shares.
Following Philips' announced intention to sell the Philips Shares, MedQuist
has gone through an extended process involving numerous potential buyers,
soliciting proposals from such potential buyers and evaluating the offers
received. As a result of such process, MedQuist received proposals (i) for the
acquisition of 100% of the Shares in which the other shareholders of MedQuist
would have received the same per share consideration as Philips, or (ii) for the
acquisition of up to 100% of the Shares in
-3-
a transaction in which the other shareholders of MedQuist would have been
offered the option to receive the same per share consideration as Philips or to
otherwise remain as equity holders of MedQuist. However, there has been no
proposal received to date by MedQuist as a result of this process which a board
committee, consisting of the three directors independent of Philips, was able to
favorably recommend to the board of directors of MedQuist. Consequently, the
board of directors of MedQuist has decided not to proceed with any of the offers
it has received to date. As a result, Philips has decided to pursue the sale of
the Philips Shares in a separate transaction in which MedQuist would not be a
party and which would not involve the other shareholders of MedQuist.
On May 22, 2008, Philips announced that it had entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement"), dated as of May 21, 2008,
with CBaySystems Holdings, Ltd. ("CBay") and a wholly-owned subsidiary thereof
pursuant to which Philips will sell the Philips Shares to this CBay subsidiary
for a stated value of $11.00 per Share (reduced by the per share amount of any
pre-closing cash dividend paid by MedQuist), consisting of cash, a promissory
note of the CBay subsidiary and a seven-year promissory note of the CBay
subsidiary convertible into CBay common stock, all as more fully described in
the Stock Purchase Agreement. The closing of the transaction is subject to
applicable regulatory approvals, approval by CBay shareholders at a general
meeting of shareholders, and the fulfillment of other customary closing
conditions and other terms set forth in the Stock Purchase Agreement.
Pursuant to the terms of the Stock Purchase Agreement, the incumbent
directors of MedQuist appointed by Philips (the "Philips Directors") will
resign, effective on the election of replacement directors, immediately prior to
the closing of the sale of the Philips Shares. Pursuant to the terms of the
Stock Purchase Agreement, the closing of the sale of the Philips Shares is also
subject to the individuals designated by CBay being elected to the board of
directors of MedQuist, effective immediately prior to the closing and upon and
subject to the effective time of the resignation of the Philips directors, as
replacements for the resigning Philips Directors.
If the board of directors of MedQuist determines to declare any cash
dividends prior to the closing of the purchase of the Philips Shares, the Stock
Purchase Agreement provides that the amount of the promissory note to be
received by Philips would be reduced on a dollar-for-dollar basis by the amount
of any such cash dividends. As of the date hereof, there has been no agreement
or decision by the board of directors of MedQuist to declare any cash dividends.
The foregoing description of certain provisions of the Stock Purchase
Agreement is qualified in its entirety by reference to the Stock Purchase
Agreement, a copy of which is filed hereto as Exhibit 1. Exhibit 1 is
specifically incorporated herein by reference in response to this Item 4.
Except as indicated in this Amendment No.7, Philips has no current plans or
proposals which would relate to or would result in any of the matters described
in subparagraphs (a) through (j) of Item 4 of the Schedule 13D.
Item 5. Interest in Securities of Issuer.
Item 5 is hereby amended and supplemented as follows:
(c) On May 22, 2008, Philips announced that it had entered into the Stock
Purchase Agreement with CBay pursuant to which CBay will purchase all of the
26,085,086 Shares beneficially owned by Philips, subject to applicable
regulatory approvals, approval by CBay shareholders at a general meeting of
shareholders, and the fulfillment of other customary closing conditions and
other terms set forth in the Stock Purchase Agreement. The response to Item 4 is
incorporated herein by reference, which is qualified in its entirety by
reference to the Stock Purchase Agreement, a copy of which is filed hereto as
Exhibit 1. Exhibit 1 is incorporated herein by reference in answer to this Item
5.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
The responses to Item 4 and Item 5 are incorporated herein by reference,
which are qualified in their entirety by reference to the Stock Purchase
Agreement, a copy of which is filed hereto as Exhibit 1. Exhibit 1 is
incorporated herein by reference in answer to this Item 6.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended and supplemented by adding the following thereto:
Exhibit No. Document
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1 Stock Purchase Agreement, dated as of May 21, 2008, by and among
Koninklijke Philips Electronics N.V., a corporation organized
under the laws of the Kingdom of the Netherlands, CBaySystems
Holdings, Ltd, a company incorporated in the British Virgin
Islands, and CBay Inc., a Delaware corporation.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: May 22, 2008
KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ James Nolan
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Name: James Nolan
Title: Attorney-in-Fact
By: /s/ James Nolan
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Name: James Nolan
Title: Attorney-in-Fact