Fairholme's Berkowitz resigns from St. Joe board

By @ibtimes on

Mutual fund manager Bruce Berkowitz resigned from the board of St. Joe Co on Monday, shortly after joining it, citing disagreements with other board members at the company where he is the largest shareholder.

His exit is the latest twist for St. Joe, the largest private landholder in northern Florida. While Berkowitz has raised his stake in the company and repeatedly said he would like to buy all of it if he could, prominent hedge fund manager David Einhorn has attacked its aggressive real estate bets and says the shares are wildly overvalued.

St. Joe shares fell 2.7 percent to $25.98 in early trade on the New York Stock Exchange.

Berkowitz and Charles Fernandez, both executives at Fairholme Capital Management LLC, also withdrew their names to be considered for election at the company's annual shareholder meeting, according to a regulatory filing.

The moves come a week after Berkowitz and Fernandez attended their first St. Joe board meeting.

Basically Charlie and I did not have a majority in favor of reform, Berkowitz told Reuters. It was Charlie and I and everybody else said no. We had trouble even calling for a meeting. We clearly disagree with management on a lot of questions: for example pay for performance, effective governance and oversight.

A St. Joe representative was not immediately available for comment.

But Berkowitz said he is not selling St. Joe shares. Fairholme has a 29 percent stake in the Florida Panhandle land owner and developer.

We're not walking away, and whatever actions we take we're going to take for all shareholders, he said.

When asked if he would stage a proxy fight, Berkowitz said; No comment.

Following a board meeting last week, St. Joe said it would engage Morgan Stanley to help it explore options including a revised business plan, joint ventures, asset sales, a merger or sale of the company.

As of Friday, when shares closed at $26.70, the stock was up 57 percent since falling to about $17 in late November. Shares had traded above $80 at the height of the real estate bubble in 2005.

The company has been in the center of competing investor views by Berkowitz and Einhorn, who are both prominent money managers. Einhorn, of hedge fund Greenlight Capital, is shorting the stock, betting its shares will fall. He first rose to prominence for criticizing Lehman Brothers' accounting methods before the investment bank collapsed.

St. Joe owns more than a half million acres of land in the Florida Panhandle.

(Reporting by Ilaina Jonas, Nadia Damouni and Martha Graybow, editing by Dave Zimmerman)

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