Electronics payment company Earthport has confirmed it is considering a possible offer for Baltimore Technologies.
Earthport said it intends to approach the company in the next few days with a proposal and to seek a recommendation.
Earthport said that any offer would involve a mixture of cash and shares, adding that there was no certainty an offer will be made.
In July, Earthport filed a £13.5 million sterling legal action against Baltimore for alleged fraud and breach of contract relating to contracts signed in March 2001.
Since May 18th, Baltimore's share price has fallen by about 70 per cent. In the same period Earthport's share price fell by a similar percentage, due to a bear position that started to build 19 days after Earthport notified Baltimore of its intent to issue proceedings, according to Earthport.
However, in late November, Baltimore approved a plan to clear its share register of small shareholders and de-list its shares.
Shareholders of Baltimore today approved the proposed consolidation of the company's share capital and the cancellation of its London Stock Exchange listing.
The consolidation of 125 existing ordinary shares of one pence each into a single new ordinary share of 125 pence will now take place, and the new ordinary shares will start trading on December 21st.
At an EGM in London today, shareholders also voted to cancel the company's listing from February 14th.
The former Internet security company also asked the High Court to strike out Earthport's claim.