Steel Partners continues to pursue Point Blank, refuses standstill agreement

By Angela McDaniels

Tacoma, Wash., May 22 - Steel Partners II, LP still wants to acquire Point Blank Solutions, Inc. and will not sign a non-disclosure agreement containing a standstill that it recently received from the company's adviser, according to a schedule 13D filing with the Securities and Exchange Commission.

Steel Partners said that as a result of the "shrinking revenues, higher cost margins and declining profitability" recently announced by Point Blank and the "grim" outlook for the current fiscal quarter, the company is not in a position to ask one of its largest stockholders to agree to a standstill.

The investor believes Point Blank's strategic review is an excuse to further delay the 2008 annual meeting "with the sole intention of entrenching management."

In February, Steel Partners nominated a slate of five people for election to Point Blank's board.

On April 8, Point Blank postponed its 2008 annual meeting until Aug. 19 from April 22 and said the board will explore strategic alternatives to enhance stockholder value, including a possible sale of the company, with the assistance of Wachovia Securities.

On April 17, Steel Partners said it filed a lawsuit requesting that the Court of Chancery of the State of Delaware order the company to hold its 2008 annual meeting of stockholders "without delay" and grant Steel Partners other "relief deemed appropriate" by the court.

In response, Point Blank said it believes Steel Partners' lawsuit is without merit.

Steel Partners noted that Point Blank has not held an annual meeting of stockholders since May 6, 2005.

Investors led by Steel Partners purchased 434,399 shares of Point Blank common stock for $3.60 to $3.75 each between April 21 and May 12, according to the SEC filing. Following the purchases, the reporting persons own 4,902,351 shares, or 9.6%, of the company's stock.

Point Blank is a Pompano Beach, Fla., producer of body armor systems for law enforcement and the military.

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