Troubled internet security firm Baltimore Technologies was yesterday caught up in a farcical takeover approach which was in effect dismissed out of hand.

Privately owned encryption specialist Chantilley Corporation issued a press release saying it had submitted a written takeover bid. The letter had been mistakenly sent to Baltimore's old office in Dublin, and the first the company knew about it was when journalists rang asking for comment.

Executives had to track down London-based Chantilley, which emailed to confirm that it had wanted to meet and discuss an "all paper" offer.

Although Chantilley later admitted it did not know how much it was prepared to offer and did not have an investment bank advising it, the email was enough to prompt a stock exchange announcement.

Baltimore said it did not believe the emails constituted an offer for the company. It added that it was not prepared to meet Chantilley until a formal bid had been received.

"I think they're being extremely myopic, to say the least," said Mike Downey, the man behind the emails and managing director of Chantilley's biggest investor, Cavendish Management Resources. "We're deadly serious and it's a shame we're having to resort to megaphone diplomacy."

Accounts filed at Companies House show Chantilley has not generated any revenues in the last two years, had £2,500 cash in the bank and a further £36,000 in shareholder funds. Baltimore is valued at £133m, despite the 98% fall of its share price from its peak.

Mr Downey claimed Chantilley's patented encryption technology is more advanced than Baltimore's. "There is no question that Baltimore's shareholders would benefit greatly from being part of a new age technology, not something that is 25 years old."

The approach follows a Baltimore share price slump, a strategic review and the recent departure of chief executive Fran Rooney. Analysts believe all this has left the company vulnerable to a takeover.

Chantilley, which is said to have been considering a £600m flotation on Nasdaq this year, was founded by Bill Hawthorne, a leading mathematician who has worked with the government on security issues. It has offices in London, Bournemouth and Dartmouth.