Baltimore Technologies shares bounced back yesterday after the placing of 37.9 million shares to raise some £167 million sterling (€287 million) was oversubscribed.

The company raised some £66 million sterling after expenses through placing 15.7 million shares. At the same time some 22.15 million Baltimore shares were sold on behalf of shareholders in Content Technologies which Baltimore has acquired. Baltimore shares, which shed 66p on Wednesday to close at 444p on concern about the size of the placing, jumped 10 per cent in early trading to 490p. By the close in London the shares were 7 per cent up on the day at 473p.

"The placing was significantly oversubscribed, which considering the day the markets had yesterday is a pretty good performance," Baltimore president and chief executive Mr Fran Rooney said yesterday. The placing, which followed a two-week roadshow throughout Europe, brought in a number of new institutional shareholders, he said. No details of the extent of the over-subscription were available but a Baltimore spokesman described it as "comfortable".

At 440p the placing is being made at a small discount of 0.9 per cent to Wednesday's 444p closing price. But the 444p share price was sharply down on Baltimore's 772p share price when the Content acquisition was announced in mid-September. In volatile stock markets Baltimore shares have fallen heavily since the beginning of September. At 473p the shares are now well off their high of 1500p reached in March.

Baltimore is raising about £66 million sterling ($96.14 million) after expenses through a placing of 15.75 million shares at 440p each. The funds will be used to expand its own and Content's operations, to develop in the US and Japanese markets and to develop new technology ideas, Mr Rooney said. Because of the fall in the Baltimore share price and because the deal was based on the transfer of a specified number of shares, the Content acquisition will now cost Baltimore much less than had been anticipated in September. At that time 91 million Baltimore shares were worth £702.5 million - at the 440p placing price they are worth just over £400 million.

When the placing is completed the number of Baltimore shares in issue will increase by about 107 million, or 26 per cent, to almost 513 million. [SBX] Baltimore has narrowly avoided a premature ejection from the FTSE-100 index after the index was reconfigured yesterday to take account of the demerger of two large FTSE-100 companies, BG and P&O.

Because BG and P&O were demerging their operations into four companies - BG, Lattice, P&O and P&O Princess Cruises - this meant that two companies had to leave the FTSE ahead of the next formal changes to the index in early December.

The ones to go are Internet provider Freeserve and P&O. It is understood Baltimore was next on the list for exclusion based on its market capitalisation, but retained its FTSE status thanks to the recovery in its share price yesterday.

Baltimore is still in danger of exclusion from the FTSE in December, given the sharp fall in its share price since it rejoined the index. But the increase in the number of shares in issue following yesterday's placing should improve its chances of retaining its place in the index.