Flow International's largest shareholder says stop CEO search, sell company

By Lisa Kerner

Charlotte, N.C., Feb. 2 - Flow International Corp.'s largest collective shareholder, led by Third Point LLC and Daniel S. Loeb, believes the company should be sold, according to a schedule 13D filing with the Securities and Exchange Commission.

The reporting persons own 32.2 million shares, or 13.6%, of the company's common shares.

In a letter to Flow International's board, Loeb expressed disappointment that Flow International chief executive officer Stephen Light is retiring as well as doubts that the company could operate successfully under new leadership.

"We increased our position over the last two years primarily because he continued to meet or exceed our high expectations," Loeb stated in the letter.

"At the same time, we have been concerned that the relatively small scale of the company's operations and its public status resulted in a disproportionate amount of general and operating expenses, concerns which have been underscored by the recent financial restatements."

Loeb ended by urging the board to stop its search for a new chief executive and instead retain an investment bank to offer Flow International for sale.

Flow International, based in Kent, Wash., manufactures and installs ultrahigh-pressure water pumps and management systems.

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