NEWS
LONDON (Thomson Financial) - CBaySystems Holdings Ltd. said its shares have been restored to trading on AIM after it published an admission document regarding its subsidiary CBay Inc. acquiring a 69.5 percent holding in MedQuist Inc. from Koninklijke Philips Electronics N.V.
CBaySystems said the acquisition, which values values Philips' shareholding in MedQuist at approximately $287 million, or $11.00 per MedQuist share, is expected to be complete in early August.
The acquisition, which constitutes a reverse takeover, is conditional on the passing of a resolution by shareholders at an EGM, to be held on Aug 5.
CBaySystems also said it is still facing U.S. legal action to halt the purchase of the stake in MedQuist, which is one of the world's largest medical transcription service organizations.
On June 30, Newcastle Partners, L.P., derivatively on behalf of MedQuist, filed an action against Philips, CBaySystems, a former director of MedQuist and four current directors of MedQuist.
The complaint alleges that four of the current MedQuist directors of MedQuist breached their fiduciary duties to MedQuist and its minority shareholders in connection with the proposed sale of Philips' shares in MedQuist to CBay Inc., and that CBaySystems and CBay Inc. aided and abetted the breach by such directors of their fiduciary duties.
At a hearing on July 9, the court denied Newcastle's application for a temporary restraining order and has now scheduled a hearing on Newcastle's request for a preliminary injunction for July 31.
CBaySystems also outlined its proposals for directorship of the enlarged group Monday, where CBaySystems co-founder and chairman Venu Raman Kumar would become vice-chair and CEO, Robert Aquilina the proposed chairman and Nanda Krishnaiah the proposed executive director.
CBaySystems also said trading during the six months ended June 30 has been in line with management expectations.
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