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Investors challenge St. Joe Co. for control of its board

MIAMI — St. Joe Co. said Wednesday it opposes its largest shareholder's efforts to replace the real estate developer's entire board.

In a statement, St. Joe, based in WaterSound on the Florida Panhandle outside Panama City, called for Fairholme Fund to make a buyout offer to shareholders if it wants to take control of the company. St. Joe also invited the mutual fund to submit any alternative business plan for consideration.

Fairholme said earlier Wednesday that it hired executive search firm Spencer Stuart to oversee a process allowing shareholders to suggest director candidates. The move came within hours of St. Joe enacting a "poison pill."

Fairholme president Bruce Berkowitz and executive Charles Fernandez resigned from St. Joe's board Monday, but in a letter filed with the Securities and Exchange Commission on Wednesday, Berkowitz said he and Fernandez have submitted their names for board consideration and agreed to serve without pay.

Fairholme also suggests former Florida Gov. Charlie Crist and Carnival Corp. chief operating officer Howard Frank as potential board members.

Berkowitz said Fairholme anticipates the remaining spots on a seven- or nine-member board would be filled with people suggested by other shareholders and Spencer Stuart.

Berkowitz and Fernandez were elected to St. Joe's board in December, but resigned Monday over disagreements with the nominating and governance process, according to an SEC filing.

Another investor critical of St. Joe, hedge fund manager David Einhorn, criticized St. Joe's efforts to bring Southwest Airlines to a nearby airport by promising to cover the airline against any losses for a specified period.

Investors challenge St. Joe Co. for control of its board 02/16/11 [Last modified: Thursday, February 17, 2011 7:18am]
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