Wednesday, February 9, 2011

St. Joe Declines After Florida Developer Announces Plans to Explore Sale

St. Joe Co., the Florida developer criticized by hedge-fund manager David Einhorn, fell as much as 6.5 percent in New York trading after the company said it hired Morgan Stanley to explore a possible merger or sale.

St. Joe will consider a new business plan, partnerships, joint ventures, alliances, asset sales and acquisitions, the Watersound, Florida-based developer said yesterday in a statement. The announcement came a month after Bruce Berkowitz and Charles M. Fernandez of Fairholme Capital Management LLC, the company’s biggest shareholder, were named to the board.

“This is a prudent time to step to the sidelines,” Buck Horne, an analyst with Raymond James & Associates Inc., wrote in a note to clients today in which he cut the stock to “market perform” from “strong buy.” “A neutral investment position is appropriate until more details are revealed.”

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