St. Joe Closes Sale of 382,834 Acres for $565 Million

[Kurt]

(November 7, 2013) - The St. Joe Company (NYSE: JOE) (the "Company") today announced that it has entered into a sales agreement (the "Sales Agreement") with AgReserves, Inc., a Utah corporation, to sell approximately 382,834 acres of its non-strategic timberland and rural land in Northwest Florida for $565 million.

The final price is subject to an adjustment set forth in the Sales Agreement. This proposed transaction does not include land within the Company's existing residential or commercial real estate segments or its resorts, leisure or leasing segment, nor include any land for which the Company had plans to develop or use in these types of operations in the foreseeable future.


"This sale of timberland will help the Company concentrate on its core business activity of real estate development in Northwest Florida," said Park Brady, CEO for The St. Joe Company. "The proceeds from the sale will provide the Company with significant liquidity and numerous opportunities to create long-term value for our shareholders."


The land to be sold includes the majority of the Company's timberlands in Bay, Calhoun, Franklin, Gadsden, Gulf, Jefferson, Leon, Liberty and Wakulla counties and had an aggregate carrying value of approximately $54 million at October 31, 2013. AgReserves, Inc. is assuming agreements and contracts existing on the purchased timberlands and intends to maintain timber and agricultural uses of the lands.


"AgReserves has demonstrated its commitment to wise land stewardship and prudent resource management during more than 60 years of ranching and agricultural operations in east central Florida. We will apply that same commitment and expertise to managing the property we are acquiring in Florida's panhandle. We look to the long term in everything we do," said Paul Genho, Chairman of the Board for AgReserves, Inc. AgReserves, Inc. is a tax-paying affiliate of The Church of Jesus Christ of Latter-day Saints.


The transaction was unanimously approved by the board of directors of the Company and by AgReserves Inc., and is subject to customary closing conditions, including regulatory approvals, and the approval of the shareholders of the Company. The transaction is expected to close in the first quarter of 2014. Following the sale, the Company will own approximately 184,000 acres of land concentrated primarily in Northwest Florida, which includes lands used or intended to be used in its real estate development operations.


TAP Advisors acted as financial advisor to the Company in connection with this transaction, with Sullivan & Cromwell LLP and Greenberg Traurig P.A. as legal counsel. Foley & Lardner LLP and Kirton McConkie PC acted as legal counsel to AgReserves, Inc.

 

[Kurt]

Question for those who follow St. Joe:

How will half a billion dollars change the company?

 

[coondog]

Question for those who follow St. Joe:

How will half a billion dollars change the company?

It doesn't. They have been sitting on $150mm in cash on their balance sheet for years. Four years ago, their main focus per press releases was developing the land around the ECP airport, which has largely been a failure. Then they turned to developing Port St. Joe, which was also not worked as the port is not deep enough to attract any serious traffic, and there is little infrastructure available to haul the goods from the port. Now their focus is back to real estate development; however, their best land (The Retreat, Water Color and Watersound Beach is largely gone). What is left are largely poor concepts such as River Camps and Windmark which have historically not been successful, and Watersound North, which will take years to develop. Their most glaring fault is how poorly they treat their residental customers, whom should be their greatest advertising strength. They continually change the rules when it suits them, and simply do not care how it impacts the individual homeowners. For example, while initially agreeing to turn over the Beach Club in Watersound Beach to the HOA, they reneged on this committment and kept ownership for themselves, requiring a $20,000 initiation fee. Now they have told all of the homeowners in Watersound Beach that despite this investment, if they do not hire St. Joe to manage their homes (at an above market rate of 30%), their guests will no longer be allowed to use the Beach Club. And despite numerous complaints, they have essentially told the owners, if you don't like it, resign your membership. Until this mindset changes, which is highly unlikely, no amount of cash on their balance sheet will help them.

 

[austin101]

Interesting the purchaser is from Utah given Bienvenue's ties to Leucadia

 

[miznotebook]

Other news reports on the sale:

http://www.wjhg.com/home/headlines/St-Joe-Land-Selling-To-Mormon-Church-231061501.html


http://www.thefloridacurrent.com/ar...edium=quick_view_link&utm_campaign=quick_view

 

[Bac]

Look for the biggest church ever to be built in SoWal. Anyone ever been to SLC at night knows the turtles about to go blind.

Have you read the articles? Pass the guns and ammunition, right here in Dixie Chick country.

Even KimmyK and the Illuminati didn't see this one coming.

What with Obama and DOHS, best you get fore-armed....

( you have been fore-warned)

HA!

 

[coondog]

JOE currently hovering $.25/share above their 52-week low after announcing the big timber sale. It would appear that the Street does not think much of thier new emphasis on focusing on real estate development.

 

[Kurt]

The St. Joe Company (NYSE: JOE) (the "Company") today announced that it closed on the sale of approximately 380,000 acres of the Company's non-strategic timberland and rural land in Northwest Florida to subsidiaries of AgReserves, Inc., a Utah corporation, for approximately $562 million, which included $200 million in the form of a timber note.


The sold land, which had an aggregate carrying value of approximately $52 million as of December 31, 2013, includes the majority of the Company's timberlands in Bay, Calhoun, Franklin, Gadsden, Gulf, Jefferson, Leon, Liberty and Wakulla counties. The transaction did not include land that the Company uses or intends to use for its various residential or commercial real estate developments, resorts, leisure and leasing operations. The Company now owns approximately 185,000 acres of land concentrated primarily in Northwest Florida and expects to continue its forestry operations on a limited basis.


"The net proceeds from this sale will provide us significant liquidity and numerous opportunities to create long-term value for our shareholders," said Park Brady, CEO for The St. Joe Company. "Management can focus on our core business activities of real estate development in Northwest Florida, including opportunities in the active adult market and expanding our resort and leisure operations."


AgReserves, Inc. has assumed agreements and contracts existing on the purchased timberlands and intends to maintain timber and agricultural uses of the lands.


"Now that the deal's done, we are looking forward to getting on the property, getting to work, and becoming part of the local communities in the Panhandle," said Paul Genho, Chairman of AgReserves. "We also appreciate the professional way that St Joe conducted themselves throughout the acquisition process and thank them and those who assisted in this transaction."


TAP Advisors acted as financial advisor to the Company in connection with this transaction, with Sullivan & Cromwell LLP and Greenberg Traurig P.A. as legal counsel. Saunders Real Estate, LLC, acted as an advisor to AgReserves, Inc., with Foley & Lardner LLP and Kirton McConkie PC as legal counsel.

 

[Matt J]

 

[coondog]

The market isn't impressed as their stock has closed down every day since the sale closed, despite the NASDAQ closing at an all time high. The analysts at Raymond James have previously questioned managements ability to implement its plans, which seem to change year to year. Cash doesn't solve this issue. This is basically a company going through an orderly liquidation at this point through a series of asset sales.