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Fairholme Says It’s in Talks With St. Joe on Makeup of Board

Feb. 22 (Bloomberg) -- Bruce Berkowitz’s Fairholme Capital Management LLC and St. Joe Co. are in discussions about the composition of the company’s board and management after Berkowitz began an effort to elect new directors.

Fairholme, the biggest shareholder of the money-losing Florida landowner, disclosed the talks in a regulatory filing today. Berkowitz, Fairholme’s founder, has been seeking to oust the board of Watersound, Florida-based St. Joe.

Berkowitz and Fairholme President Charles M. Fernandez resigned from St. Joe’s board last 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 St. Joe, which has lost money for 10 consecutive quarters.

The goal of the talks is “reaching an agreement that would be in the best interests of all stockholders,” according to today’s filing. “There can be no assurance that any agreement will be reached.”

The company’s board “adamantly opposes” Fairholme’s plans, St. Joe said in a statement last week. 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.”

Telephone messages left for Berkowitz and David Childers, a St. Joe spokesman, weren’t immediately returned.

The filing was made after the close of regular U.S. trading. St. Joe fell 21 cents to $27.89 at 4:15 p.m. in New York Stock Exchange composite trading.

St. Joe, in a separate statement today, said it delayed the release of its fourth-quarter earnings to March 1 from Feb. 24. The change will allow "adequate time" for St. Joe to complete preparation of its 10-K annual report, the company said.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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