Baltimore Technologies, the troubled internet security software firm, said yesterday that Chantilley, a private London-based company, had requested a meeting with it to discuss merger options.
However, Baltimore said it was not prepared to meet Chantilley until it made a firm proposal following up its written suggestion of an all-paper deal. Baltimore was forced to put out a statement after Chantilley, which only posted its letter to Baltimore yesterday, distributed a press release. Mike Downey, a director of Chantilley, said the company, which does not have a financial adviser, was not able to submit a firm proposal.
"If I was a shareholder in Baltimore, I'd be extremely unhappy if my board did not at least have discussions. I've said our technical staff should meet with theirs because, frankly, they don't yet have enough knowledge about what Chantilley's technology is to be able to understand the importance of the approach we've made," he said.
In a statement, issued after the market had closed, Baltimore said it did not believe the letter from Chantilley constituted an offer and thought the approach was unlikely to result in an offer that it could recommend to shareholders.
It said the purpose of the meeting proposed by Chantilley was to discuss "proposals to be made by Chantilley regarding a possible combination of the two companies, which may result in an offer for the issued share capital of Baltimore".
Chantilley, which owns fax security and online credit card transaction protection technology, employs 20 staff compared with Baltimore's 1,000. The company, which had hoped to float on Nasdaq last year, is backed by Cavendish Management Resources, a UK venture capital firm. It would hope to gain a stock market listing by reversing into Baltimore. Mr Downey, CMR managing director, denied the move was a publicity stunt. "We made an approach a year ago, which was more of a strategic alliance," he said.
This week Baltimore announced the resignation of Fran Rooney, its chief executive and deputy chairman. Paul Sanders, Baltimore's finance director, is acting as interim CEO.