Major St. Joe investor Berkowitz launching takebackjoe.com to push board changes at real estate giant
Wake up and good morning. The future of real estate development giant St. Joe Co., already murky, is taking another twist. Major shareholder Bruce Berkowitz of Fairholme Capital -- who only last week praised St. Joe’s direction, as well as its decision to hire Morgan Stanley to find potential buyers for the company -- now wants to oust the Florida real estate company’s board. And he plans to name four nominees to St. Joe’s board. They are Berkowitz (photo, left) himself; former Florida governor Charlie Crist (photo right, below); Fairholme president Charles M. Fernandez, and Carnival Corp. vice chairman Howard Frank.
His firm has also hired the executive search firm Spencer Stuart to find the remaining three to five directors.
At 5 a.m. this morning, Berkowitz (whose Fairholme owns 29 percent of the Panhandle-headquartered St. Joe) issued his own press release with these highlights.
1. Fairholme filed a 13-D statement with the Securities and Exchange Commission.
2. The filing includes a letter to St. Joe shareholders outlining Berkowitz's intentions.
3. The letter says: "The Fairholme Fund is starting a shareholder process to replace the existing board of St. Joe. This was not a decision made lightly. We are not activists. We always try to support the boards, management and shareholders of our portfolio companies. We like when everyone wins. When we saw problems at St. Joe, we tried to make constructive changes within the board structure. We ultimately came to the conclusion that this was not possible."
4. St. Joe's management is not representing the interests of shareholders.
5. Fairholme will soon unveil the web site takebackjoe.com to make it easy for St. Joe shareholders to follow Berkowitz's plan and to offer their own names for additional board members.
6. "We've lost enough. Let's take back Joe," Berkowitz says at the end of the letter.
What precipitated this move, among other things, was St. Joe's decision to create a new "shareholders rights" plan Tuesday, which Berkowitz did not like.
The sad joke, if one can be found in all of this, is that Berkowitz and his Fairholme had been up to now, St. Joe's biggest defender, battling the well-known short-seller David Einhorn of Greenlight Capital.
Now St. Joe's lost the faith of someone holding nearly a third of the company.
Are we watching the start of a (perhaps hostile) takeover? Let the battle begin.
-- Robert Trigaux, Times Business Columnist