Making a scene of a private affair

Baltimore Technologies was a star of the internet boom. The shares, which once hit £140, now sell at under 50p. Institutional shareholders have cut their losses and gone, but 45,000 mainly small shareholders are still there.

Down but not quite out, Baltimore has been a testbed for a PR campaign, albeit one the board didn’t want. A group known as Acquisitor wants control of the firm, and has been campaigning to replace the principals on the board with three directors. The meeting to vote on this was yesterday –lousy for our deadlines – so I can’t tell you the result.

But the strategy is interesting nonetheless.

The problem faced by the aggressors, advised by Gavin Anderson, was that Baltimore exercised its right not to hand over the share register for three months, so a mailshot to garner support from shareholders was impossible. Also, it would have been ineffective, as large numbers of small shareholdings these days are registered under the names of stockbroker nominees, which means details of the beneficial owner are not available.

Gavin Anderson therefore had to find other ways to contact shareholders, explain the plan and garner their votes. The strategy had four prongs. First, it mobilised the financial press. Second, it set up an action group website and used it to explain the firm’s plans, flush out horror stories and mobilise the thousands of stricken investors. Third, it organised roadshows which, though sparsely attended, generated publicity and located large pockets of shares. And fourth, it used these channels to publish an open letter. But perhaps its biggest coup was to get under the skin of the Baltimore board so that it was goaded to retaliate. Had it stayed quiet, the story might have died. But because it fought back, complained to the regulator and generally showed that it was rattled, it kept the story alive. So the question for Baltimore, if it lost, is whether it would have done better to hold its nerve and keep its head down.

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