Baltimore Technologies has moved to quash speculation that 27 million shares held by former shareholders of Content Technologies will be dumped on the market in the next two weeks.

Baltimore acquired Content Technologies last September by issuing 91 million of its own shares when they were trading at 770p, valuing Content at just over £700 million sterling (#1.1 billion). A month after the acquisition, more than 22 million Baltimore shares held by Content's former shareholders were placed in the market at 440p sterling each, leaving 69 million shares.

Since then, however, the value of those remaining shares has fallen by 70 per cent, leading to speculation of a share sell-off by Content. This week, there were rumours in the London market that Content shareholders planned to sell 27 million shares - 6 per cent of Baltimore's total equity - next Thursday. Baltimore, however, disclosed yesterday that, under the terms of the lock-up arrangement, just 7.25 million of the Baltimore shares held by one former Content shareholder can be sold from March 15th onwards.

A further 11.1 million shares held by 69 former Content shareholders - 2.2 per cent of the total - can be sold from April 25th. A further 21.6 million shares can be sold from October 25th while 18.1 million shares can be sold in October 2002.

Baltimore shares recovered some ground yesterday after the recent heavy selling. But even though the immediate overhang of the shares held by Content's former shareholders is a lot less than the 27 million suggested this week, the initial overhang of 7.25 million shares will depress the shares.