Ambac FinancialGroup Inc. on April 11 responded to Canyon Capital Advisors LLC's attempt to replace the company'schairman of the board, saying that "placing a creditor advocate on the AmbacBoard simply makes no sense."
The comments follow preliminary proxy materials filed by Canyon in support of its proposalto elect Frederick Arnold to the Ambac board to replace Jeffrey Stein as chairmanof the board.
Ambac noted in its statement that Canyon has failed to offerany substantive suggestion for how they would create value from a stockholder perspectiveor any explanation of how stockholder value would be created if only Canyon's nomineewere running the board. The company said Canyon has instead adopted a campaign ofattacks against Stein and Ambac President and CEO Nader Tavakoli.
Ambac also disclosed that it was recently approached by a brokeroffering to sell to Ambac a package of Ambac-insured RMBS matching Canyon's previouslypublicly disclosed CUSIP numbers and position sizes, at a 17% premium to marketvalue. The company said it saw the attempt as greenmail and immediately rejectedout of hand.
The company also welcomed Canyon's decision to abandon its of Eugene Davis and JohnBrecker to the board.