Baltimore directors face fresh battle

The directors of Baltimore Technologies could be forced to defend a second bid to sack them in six weeks as a result of the latest twist in the battle for control of the former internet security company and its €37 million cash pile.

The company revealed yesterday that its biggest shareholder, Bermuda-based investor, Acquisitor Holdings, has increased its stake in Baltimore to 19.09 per cent and demanded an extraordinary general meeting (e.g.m.). Acquisitor wants to remove the current board and install its own directors.

In a statement, London-listed Baltimore said Acquisitor had called for the meeting in a written notice delivered after office hours on Monday. It will put resolutions to the e.g.m. seeking "to remove the entire board of Baltimore".

Acquisitor had already sought to have the same resolutions discussed at Baltimore's annual general meeting (a.g.m), which is due before the end of August.

However, under Stock Exchange rules, Baltimore has just 42 days, or six weeks, to convene the e.g.m. It will have to send a circular to all shareholders detailing the resolutions within 21 days, and then has a further 21 days in which to hold the e.g.m. itself. This means the meeting would be likely to take place early in July.

Earlier this month, Baltimore's board, led by non-executive chairman, Mr Bijan Khezri, and chief executive, Mr David Weaver, successfully saw off a similar challenge from Acquisitor at an e.g.m. in west London.

However, the resolutions were only defeated by a narrow margin, and Acquisitor at the time argued that it had difficulty contacting all shareholders because a large proportion of the equity is held through nominee accounts.

Baltimore was originally a Dublin-based internet security specialist and has 5,000 Irish shareholders. Four years ago it had a share price of £15 sterling and was part of the FTSE Top 100 index. However, its share price dropped dramatically when the technology bubble burst in mid-2000. It is now a shell with €37 million in cash.

Its board wants to use the money to enter the alternative energy market. Acquisitor is opposed to this move, but has not said what it intends to do with Baltimore.

In his statement yesterday, Mr Khezri accused Acquisitor of attempting to take control of the company without paying for it. "At the e.g.m. on May 6th, independent shareholders voted unequivocally against Acquisitor taking control," he said.

"Immediately following the e.g.m., Baltimore initiated contact with Acquisitor. A meeting was arranged for this week to enter into a constructive dialogue to explore a mutually acceptable way forward.

"Acquisitor has chosen to disregard this and requisition a further e.g.m., instead of waiting for the a.g.m., at great disruption and significant additional cost to the company and its other shareholders.

"This again highlights Acquisitor's agenda to seize control of Baltimore's assets at the earliest possible opportunity without making a formal offer and paying a premium to all shareholders for control," he claimed.