Ambac Finl Grp (AMBC) Provides Updates to Shareholders
NEW YORK, May 04, 2016 (GLOBE NEWSWIRE) — Ambac Financial Group, Inc. (Nasdaq:AMBC) (“Ambac”), a holding company whose subsidiaries, including Ambac Assurance Corporation (“Ambac Assurance”), provide financial guarantees and other financial services, issued the following statement regarding the campaign by Canyon Capital Advisors (“Canyon”) to replace Chairman Jeffrey S. Stein with their handpicked nominee.
Canyon has escalated their campaign once again with another series of shrill attacks. In our view, this is just another attempt to advance their credit-focused agenda to the detriment of AMBC shareholders. The facts are starkly inconsistent with their assertions:
- AMBC has delivered outstanding operating performance. Our adjusted book value per share has steadily and substantially increased from -$7.23 to $24.78, and book value per share from $6.38 to $37.41, since our emergence from bankruptcy in 2013. We also have delivered more than $2.5 billion in operating income, or $54.73 per fully diluted share, and $1.5 billion in net income, or $31.94 per fully diluted share, since emerging from bankruptcy in 2013.
- We have aggressively and successfully managed risk. Our net par exposure has decreased by $88 billion, or 45%, since emergence from bankruptcy, and by 25% in 2015 alone, including a 23% reduction in adversely classified credits. We have secured strong results for our shareholders in litigation, including the $995 million cash settlement in our RMBS litigation with J.P. Morgan.
- AMBC Board and governance are strong. We have nominated six seasoned and successful executives with diverse and relevant skills and experience, four of whom have been added to the Board since April 2015, five of whom are independent and all of whom are united in their goal of maximizing value for all stockholders.
- Canyon’s campaign is also focused on ousting our CEO, Nader Tavakoli. Because Ambac’s outstanding operating results leave them no room for criticism, they instead have tried to inflame shareholders with various attacks on compensation. AMBC has provided a detailed, fact-based outline of Mr. Tavakoli’s compensation, which is within market norms and compares favorably with AMBC’s most direct competitors, in documents filed with the SEC a few weeks ago. These documents can be found at http://ambacforshareholders.com/presentations/.
- Our relationship with our regulator has been — and will be — key to our success. We have gained an increased flexibility to manage our business, which has helped drive our operational outperformance. We are focused on prudent use of our capital – and we believe Canyon’s argument that Ambac has excess capital that is being “hoarded” is deliberately and misleadingly ignorant of the fact that no distributions occur without the approval of the regulator, who has a focus on the long-term policy obligations of AMBC Assurance.
Canyon has launched a distracting and costly campaign, and has constantly been on the attack, yet they claim that they don’t want to change the direction of the board. We find that claim disingenuous and misleading. Canyon launched a proxy fight to replace half of the board, but quickly withdrew two of its three nominees, likely due to various issues with those nominees.
Canyon also says that they are not trying to change the CEO, but they then slip in a statement revealing their true agenda (they are not seeking CEO change “at this time”). Canyon’s frequent attacks on the CEO, which appear to coincide with various actions taken by Mr. Tavakoli on behalf of AMBC’s shareholders that did not benefit Canyon’s narrow interests, belie the fact that Canyon’s credit position dominates its equity position in AMBC.
Finally, and most notably, Canyon has continued to aggressively pursue their fight, focusing on replacing the Chairman of AMBC, Jeffrey S. Stein, who has developed a constructive relationship with our chief regulator, established a strong governance framework, attracted four new independent directors and delivered substantially reduced risk and operational outperformance — with our fourth quarter 2015 serving as clear evidence of the success of those efforts, and a signal that we are on the right track to continue to deliver shareholder value.
No wonder over 20% of Ambac’s shareholders have already rejected Canyon’s campaign and have publicly supported Mr. Stein and the Ambac Board. Canyon has a position in debt securities either issued or insured by Ambac that is more than ten times larger than its equity position. The fact that they have continued their campaign to install their nominee despite the recent addition of two new stockholder-supported directors demonstrates to us that their focus is on advancing an agenda that is not aligned with the interests of all stockholders.
Ambac urges stockholders to vote the WHITE proxy card in favor of our highly-qualified nominees who are all focused on maximizing value for all stockholders. Ambac strongly encourages stockholders to visit “ambacforshareholders.com” to find additional important information. We appreciate the feedback and dialogue that we have received from shareholders, and remain laser-focused on delivering sustained value to them.
Ambac Financial Group, Inc., (“Ambac”) filed a definitive proxy statement with the Securities and Exchange Commission (“SEC”) in connection with its 2016 Annual Meeting on April 20, 2016. STOCKHOLDERS ARE URGED TO READ THIS PROXY STATEMENT, THE ACCOMPANYING WHITE PROXY CARD AND OTHER RELEVANT DOCUMENTS FILED BY AMBAC WITH THE SEC IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov and through the website maintained by Ambac at http://ir.ambac.com.
Certain Information Regarding Participants
AMBC, its directors and certain of its officers and other employees may be deemed to be participants in the solicitation of Ambac’s stockholders in connection with its 2016 annual meeting. Information regarding the names, affiliations and direct and indirect interests (by security holdings or otherwise) of these persons can be found in Ambac’s definitive proxy statement for its 2016 Annual Meeting, which was filed with the SEC on April 20, 2016. To the extent holdings of Ambac’s securities by such persons have changed since the amounts printed in the 2016 definitive proxy statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or on Statements of Change in Ownership on Form 4 filed with the SEC. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, is set forth in the definitive proxy statement and, to the extent applicable, will be updated in other materials to be filed with the SEC in connection with Ambac’s 2016 Annual Meeting. Stockholders may obtain a free copy of the proxy statement and other documents filed by Ambac with the SEC from the sources listed above.
Non-GAAP Financial Data
In addition to reporting Ambac’s quarterly financial results in accordance with GAAP, Ambac reports two non-GAAP financial measures: Operating Earnings and Adjusted Book Value. A non-GAAP financial measure is a numerical measure of financial performance or financial position that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. We are presenting these non-GAAP financial measures because they provide greater transparency and enhanced visibility into the underlying drivers of our business and the impact