For the first time since its management shake-up last year, The St. Joe Co. had a conference call to discuss its quarterly results. But if you’re looking for insights into what the new management team is up to, you may be out of luck.
St. Joe’s Aug. 2 conference call actually added a new level of mystery to the company.
The only St. Joe executive that participated in the call was Chief Financial Officer Tom Hoyer. He began by explaining St. Joe’s new approach to investor relations, which makes the company less approachable.
“We’re running with a lean management team here, so to save time and make it easier to comply with Regulation FD, we’re no longer meeting with analysts and investors between the quarterly earnings announcements,” Hoyer said.
“These quarterly earnings calls, like this one today, will be your main opportunity to ask questions. I will prepare, 10 days after the call, to take phone calls to clarify statements made on today’s call, but I won’t be answering additional questions or adding information to what was said on today’s call,” he said.
Buck Horne of Raymond James & Associates was the only analyst to ask questions during the call, and his report on the company last week had some strong words for St. Joe’s new investor relations policy.
“In our 18 years of real estate research, we have never seen a company take such an insular position toward corporate communication — not just for sell-side analysts, but the company’s actual owners. Plainly, we find the current policy an unacceptable disservice to shareholders,” he said.
Horne said the conference call policy isn’t the only problem.
“More troubling than any of those decisions, in our view, was the revelation that St. Joe’s new management team also will no longer be accepting or hosting either analysts or shareholders who may want to visit the company’s properties or speak with management while in Northwest Florida,” he said.
“While we can respect any company’s decision to either hold or not hold a public conference call, the combination of the aforementioned communication restrictions with this new visitation policy that will likely isolate management from the majority of its shareholders (both current and prospective) is particularly troubling, in our view,” he said.
When St. Joe was headquartered in Jacksonville, the company always was eager to show off its properties in the Florida Panhandle. I took two trips myself with St. Joe executives to tour those properties and learn their vision for them.
Even after St. Joe moved its headquarters from Jacksonville to the Panhandle to be closer to most of its land holdings, the company executives remained accessible before the management shake-up.
Horne said that accessibility was important for the company.
“The St. Joe story and potential inherent value of its assets has always required long-term visionary thinking — from its board, from its management, and most importantly, from its shareholders. In our view, the only way to ever realize the full highest and best value from these assets is to maintain an extremely open, transparent, and active dialogue with all potential parties that can help fuel the development and migration of economic capital into Northwest Florida,” he said.
By the way, St. Joe, which has lost money every year since 2008, recorded a profit of $176,000 in the second quarter.
No vote for RailAmerica shareholders
According to Bloomberg News, the first lawsuits were filed last week in Delaware by shareholders of RailAmerica Inc. who are unhappy with the company’s proposed buyout by Genesee and Wyoming Inc. for $27.50 a share.
Shareholder lawsuits have become commonplace when a public company agrees to a merger, and they rarely have an impact on the deals.
However, it will be interesting to see what happens in the RailAmerica case because unlike other public company mergers, RailAmerica shareholders won’t have an opportunity to vote on the deal.
In an information statement for shareholders filed with the Securities and Exchange Commission, RailAmerica said Fortress Investment Group LLC, which controls 60 percent of the stock, has already approved the deal.
“As a result, no further action by any stockholder of the company is required under applicable law or the merger agreement (or otherwise) to adopt the merger agreement, and the company will not be soliciting your adoption of the merger agreement and will not call a stockholders meeting for purposes of voting on the adoption of the merger agreement,” the information statement said.
So minority shareholders don’t have a say. The only option they have to oppose the deal is a lawsuit.
The information statement also gives details about how the merger of the two short-line railroad operators came together. It started with a RailAmerica board meeting in late April where the directors decided to explore a possible sale.
RailAmerica’s investment banker, Deutsche Bank, contacted 74 potential bidders and even before negotiations started with those bidders, word leaked out.
“On May 21, 2012, rumors appeared in the media that the company was considering strategic alternatives, which could include a sale of the company,” the filing said, so the company issued a news release May 22 admitting that it was considering a sale.
RailAmerica on May 30 received eight “indications of interest” at prices ranging from $24 to $28 a share, and more intensive negotiations followed.
The agreement with Genesee was finalized on July 23.
Fidelity launches tender offer for J. Alexander’s
Fidelity National Financial Inc. last week formally launched its tender offer for its restaurant subsidiary to buy J. Alexander’s Corp., and its SEC filing made in connection with the tender suggests negotiations may not be over.
Fidelity first offered to buy J. Alexander’s in June for $12 a share but announced in late July it raised the offer to $13 after
J. Alexander’s received two other potential offers during a “go-shop” period.
J. Alexander’s never gave details of the two other offers, but last week’s filing says those two unidentified parties proposed buyouts of the restaurant chain for $12.50 and $12.60 a share.
Both parties eventually raised their bids to $13, which forced Fidelity to increase its offer from $12 to $13.
When that agreement was announced, J. Alexander’s said it was terminating its evaluation of the two other offers. However, last week’s filing said that one of the two parties has since made an unsolicited proposal to buy the company for $14 a share.
So the drama continues. Fidelity’s tender offer to buy the shares for $13 each expires on Sept. 5.
Hardee’s parent CKE postpones IPO
It was an interesting week in the initial public offering market, led by another restaurant company that was once connected to Fidelity.
California-based CKE Inc., which operates the Hardee’s and Carl’s Jr. chains, was scheduled to price its IPO last week. However, the company announced Thursday that “due to market conditions it has determined not to proceed” with the stock sale.
Long before Fidelity became involved with its current restaurant subsidiary that owns several chains, Fidelity was a major investor in CKE. For several years in the 1990s, current Fidelity Chairman Bill Foley was CEO of both Fidelity and CKE at the same time.
CKE was planning to sell 13.3 million shares at $14 to $16 each in its IPO. The company did not say when or if it will try again to complete the IPO.
Bloomin’ Brands prices IPO lower
Bloomin’ Brands Inc. was able to price its IPO last week, but it had to settle for a lower price than it had hoped.
After estimating in SEC filings that it would sell its stock for $13 to $15 a share, Bloomin’ Brands’ offering of 16 million shares was priced at $11 each.
Tampa-based Bloomin’ Brands operates the Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse & Wine Bar and Roy’s chains, with more than 1,400 restaurants in 48 states and 20 countries.
The stock did rise on its first day of trading Wednesday, reaching as high as $13.08 and closing at $12.41.
Bloomin’ Brands trades in the Nasdaq market under the ticker symbol “BLMN.”
WhiteWave Foods plans IPO
In other IPO news last week, WhiteWave Foods Co. filed a registration statement with the SEC for an offering of up to $300 million in stock.
Dallas-based WhiteWave is being spun off from Dean Foods Co. It says it makes “branded plant-based foods and beverages, coffee creamers and beverages and premium dairy products” in North America and Europe. The business had revenue of about $2 billion last year.
WhiteWave has four plants in Europe and five in the U.S., including one in Jacksonville.
A company spokesman said last week he could not give details about employment and products made at the Jacksonville plant because of the SEC-mandated quiet period before a stock offering.
Under the IPO plan, Dean Foods will retain 80 percent of WhiteWave’s stock but eventually distribute those shares to current Dean Foods stockholders.
WhiteWave expects to trade on the New York Stock Exchange under the ticker symbol “WWAV.”
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