Baltimore denies takeover rumours

Takes bullish 'business as usual' stance on channel.

Despite a potential takeover bid looming, troubled security software vendor Baltimore has claimed it is business as usual for its channel partners.

The Dublin-based company, which recently announced the resignation of its chief executive, Fran Rooney, has played down rumours of a takeover.

The firm shed 18 per cent of its workforce and embarked on a major cost-cutting venture earlier this year to save £14m annually.

"As far as we are concerned it is business as usual for Baltimore and this incident will have no effect on our channel partners or customers," a Baltimore representative claimed.

Baltimore, whose share price has fallen by 95 per cent this year, was approached last week by smaller encryption technology firm Chantilley regarding a possible combination of the two companies.

A letter was sent to Baltimore by Chantilley requesting a meeting to discuss proposals.

However, the representative said Baltimore would need a firm proposal before the matter could be taken any further.

In a statement, Baltimore claimed Chantilley's letter "only envisages an all-paper transaction", and in the company's opinion "does not constitute an offer".

"As a publicly trading company we are concerned with the best interests of our shareholders, and this is unlikely to result in an offer that the board could recommend to shareholders," the representative said.

According to Chantilley's finance director, Mike Downey, Baltimore should look at the offer as "key to its recovery and positioning in the industry, rather than dismissing it".

"Baltimore is totally missing the point. This offer can have strong strategic value for it," Downey claimed. And he pointed out that Baltimore uses technology that is 25 years old.

"In the past this has been good for low-volume, low-speed technology, but as the industry has started moving into the high-volume, high-speed market, it cannot keep up," Downey said.

An industry expert said Baltimore's investors were probably enjoying an increase in share value, but claimed the offer would probably "come to nothing".

"However, this opens the way for other, potentially hostile takeovers, because the company seems to be open to offers," he said.