Flow rejects Third Point's offer to buy the company due to lack of information

By Lisa Kerner

Charlotte, N.C., May 2 - Daniel Loeb, head of Third Point LLC, should have named his price and detailed committed financing in his bid to buy Flow International Corp., according to a letter from Flow board chairman Kathryn L. Munro included in an 8-K filing with the Securities and Exchange Commission.

Loeb's April 23 letter to Flow did not "provide the board with an adequate basis from which to determine whether further discussion or access to confidential business plans and other information is warranted."

"The board, together with its outside investment banking adviser Houlihan Lokey Howard & Zukin, continues to review the company's strategic alternatives. Until we have completed our review of our strategic alternatives, it is premature to make a judgment as to whether it is appropriate for the company to engage in a sale process," Munro's letter stated.

Munro assured Loeb that any sale of the company would be done under an organized process and open to all qualified potential bidders.

Loeb said previously he was prepared to make an offer to buy the company if permitted to work with chief executive officer Stephen Light. Light, however, indicated he wasn't interested in a proposal and will retire as planned.

Third Point, a New York investment adviser, has been pushing for the company to retain an investment bank since February. In addition, Loeb has been critical of the board and the qualifications of its members. Third Point is Flow's largest shareholder with a 13.6% controlling stake in the company.

On April 9, in response to Loeb's criticism, Munro said the board was "committed to listening to constructive suggestions and ideas from all of our shareholders," according to a company news release.

Based in Kent, Wash., Flow develops and manufactures high-pressure water jet technology equipment used for cutting, cleaning and food-safety applications.

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