Bruce Berkowitz, the fund manager seeking to oust the board of St. Joe Co., said the money-losing Florida landowner can become profitable under new management.
Berkowitz, whose Fairholme Capital Management LLC is the developer’s biggest shareholder, is seeking investors for St. Joe land, he said in an interview today. The change in control at General Growth Properties Inc., the Chicago-based mall owner that exited bankruptcy last year, can be a model for a turnaround, he said.
“We did it there,” Berkowitz said in a telephone interview today. “The restructuring, new management, all done in less than a year.”
Fairholme, William Ackman’s Pershing Square Capital Management LP and Brookfield Asset Management Inc. committed more than $8 billion to bring General Growth out of bankruptcy. Fairholme agreed to sell its stake in the mall owner to Brookfield in January in a deal valued at about $1.7 billion.
Berkowitz and Fairholme President Charles M. Fernandez resigned from St. Joe’s board this week after disagreements over its compensation, nominating and governance process. They hired executive search firm Spencer Stuart to solicit investor approval to replace the board of the Watersound, Florida-based company, which has lost money for 10 consecutive quarters.
St. Joe Opposition
St. Joe’s board “adamantly opposes” Fairholme’s plans, the company said in a statement yesterday. The developer, which has hired Morgan Stanley to explore strategic alternatives, said Berkowitz is attempting to take control “through a costly and disruptive proxy contest.”
St. Joe Chief Executive Officer William Britton Greene had total compensation of $2.8 million in 2009, according to data compiled by Bloomberg. That year, St. Joe reported a loss of $130 million on revenue of $138.3 million.
“We could bring in tomorrow fabulously successful, proven executives in this space at half the price,” said Berkowitz, who was named the top U.S. stock manager of the decade last year by Morningstar Inc., the Chicago-based research firm. “It can all be done quickly. It gets complex when roadblocks are put up everywhere in order to protect self interest.”
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