Baltimore Technologies, the former internet star which converted into a cash shell, is to be delisted by Acquisitor, the Bermuda-based fund which wrested control of the business earlier this year.
The delisting will be preceded by a share consolidation which will force more than half of its 40,000 small shareholders to crystallise their losses and sell out of the company. Investors holding fewer than 16 shares - which at the peak of Baltimore's meteoric rise would have been worth £21,600 - will receive nothing back for their investment.
Acquisitor, which ousted the former management led by Bijan Khezri in July, said that it intended to hold an extraordinary shareholders' meeting on 20 December to push through the plan and then delist the shares in February next year.
Baltimore was once a FTSE 100 stock valued at £7.4bn. At last night's closing price of 15.5p, it was worth £8.4m.It has cash reserves of about £23m.
The share consolidation will involve the conversion of 125 existing shares into one new ordinary share. Of Baltimore's 40,000 shareholders, 24,000 own fewer than 125 shares. These investors will see their shares grouped together and sold off and the proceeds returned to them. At the peak of Baltimore's stock market valuation, a holding of 125 shares would have been worth £168,750. Today they would be worth less than £20.
Under current listing rules, shareholder approval is not needed to delist a company's shares. Baltimore said that it had decided nevertheless to put the plan to a vote. But this is likely to prove academic as Acquisitor owns 26 per cent of the shares and needs only a simple majority of shareholders voting to delist.
It defended the decision to disenfranchise shareholders on the grounds that there were significant costs involved in servicing a shareholder base of 40,000 and that if it found a use for Baltimore's £23m cash reserves it would need to issue a circular to all shareholders to seek approval. "The board believes that this requirement may hinder the company in its efforts to explore and initiate new business opportunities," it added.
Baltimore said that following the cancellation of the company's listing, it would look at the possibility of setting up a matched bargain facility so investors could still trade their shares. Duncan Soukup, the deputy chairman of Acquisitor who took over as acting chief executive of Baltimore following last July's coup, was not available for comment.
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