ARLINGTON, Va., May 31, 2016 /PRNewswire/ -- Arlington Asset
Investment Corp. (NYSE: AI) (the "Company" or "Arlington") today announced that the two
leading independent proxy advisory firms, Institutional Shareholder
Services ("ISS") and Glass Lewis & Co. ("Glass Lewis"), have
recommended that Arlington
shareholders vote "FOR ALL" eight of Arlington's highly-qualified and experienced
director nominees – Eric F.
Billings, J. Rock Tonkel,
Jr., Daniel J. Altobello,
Daniel E. Berce, David W. Faeder, Peter
A. Gallagher, Ralph S. Michael,
III and Anthony P. Nader, III
– on the WHITE proxy card at the Company's Annual Meeting of
Stockholders on June 9, 2016.
In its May 28, 2016 report, ISS
concluded1:
- "Unaffiliated shareholders should, first and foremost, ask
themselves what this contest is really about. It is clearly not
about the potential to unlock hidden value for all shareholders,
given the dissident's cost to run the contest alone is more than 7
times its investment in the company's equity, making the breakeven
point on share price appreciation an utterly unrealistic aim.
Neither is it about the performance of the current board and
management team, as the evidence of numerous equity analysts with
far more than 2 days experience analyzing the company and the
industry attests. Though it is common for management teams facing a
proxy contest to malign the intentions of the activist, in this
case the board's view of the dissident's real intentions
actually provides the most compelling – perhaps the only rational –
economic explanation for the contest itself."
- "Ultimately there is but one way for unaffiliated shareholders
to find out – and the risk of opening that door to find out what's
behind it is so asymmetrically against them that it cannot possibly
be worth considering. It is enough to recognize that whatever their
intentions if they gain control of the board, the dissidents have
not made even a remotely compelling case that change in the board,
executive team, or strategy is warranted."
In its May 27, 2016 report, Glass
Lewis concluded1:
- "Finally, we have a hard time taking the Dissidents' campaign
particularly seriously given the relatively nominal economic
commitment made by the Dissidents (who currently own less than
1/20th of 1% of the Company's outstanding shares) and the fairly
short amount of time that the Dissidents have been shareholders of
the Company (a period spanning less than three months). The
aforementioned factors, coupled with the fact that the Dissidents
are suddenly seeking board-level control without making any prior
attempts to engage in substantive dialogue with the Company's
board, suggest to us that the Dissidents are likely more
interested in pursuing a stealth takeover of the Company as opposed
to truly taking steps to enhance value for all Arlington shareholders."
- "Our concerns regarding the Dissidents are further bolstered by
what we believe has been a troubling series of results at Imation
since Clinton Group successfully ran a proxy contest at Imation
last year. Notably, during the period that Clinton Group has had
board control of Imation, Imation's share price has lost around
two-thirds of its value. Further, Clinton Group and its Imation
board nominees have engaged in a series of related party
transactions at Imation that, in our view, have largely served to
enrich Clinton Group and its affiliates at the expense of Imation
and unaffiliated Imation shareholders."
- "Moreover, Clinton Group wants to dramatically alter Imation's
business from being a pure-play data storage and security firm to
one that additionally engages in completely disparate business
lines, as evidenced by this proxy contest and the fact that Imation
recently launched a plan to establish a registered investment
adviser as a wholly owned subsidiary. Putting one and one together,
we believe there is a strong likelihood that the Dissidents may
seek to have their recently-established investment adviser replace
the Company's existing management team, thereby enabling the
Dissidents to rake in external management fees from the Company at
amounts that could be set by the Dissident Nominees."
In supporting ALL of Arlington's nominees to the Board at the 2016
Annual Meeting, ISS also stated in its May
28, 2016 report1:
- "But there is also the matter of the dissidents' ask: having
invested only $140,000 in a toehold
ownership stake which will allow it status to run a contest, the
dissident – which is pivoting from a tech firm to an asset manager
– is now seeking control of a company with $3.6 billion in financial assets that board could
redeploy. Were those funds redeployed into a hedge fund, as the
Clinton Group nominees to the Imation board redeployed the assets
of that company after taking control, the fees alone would be
enormous."
In supporting ALL of Arlington's nominees to the Board at the 2016
Annual Meeting, Glass Lewis also stated in its May 27, 2016 report1:
- "…we believe that the Company should still be reasonably
well-positioned to see an upturn in its economic value to the
extent that recent rate and spread trends reverse in the future. We
also note that the Company's board and management team have been
actively taking steps in recent quarters to attempt to address the
current market conditions."
- "If the Dissidents were to gain control of the Company and
close out some of the Company's existing long-term hedges, at least
some of the Company's current unrealized hedge losses would become
realized, resulting in a permanent book value impairment."
Commenting on the ISS and Glass Lewis reports, Arlington issued the following statement:
The unanimous recommendations from
ISS and Glass Lewis to vote FOR ALL eight of Arlington's highly qualified directors
underscores our belief that we have the right Board of Directors,
the right management team – the right management structure – and
the right strategy to continue delivering significant long-term
value to Arlington shareholders.
Since beginning its current investment strategy, the Company has
delivered 25 consecutive quarters of dividends, distributing a
total of $19.40 per share, and we
believe the Company's conservatively hedged investment portfolio is
well-positioned in an environment where interest rates are expected
to rise.
Both ISS and Glass Lewis highlight
the significant risk to Arlington
shareholders if the Imation Corp. (NYSE: IMN) and Clinton Group,
Inc. (collectively, the "Imation Group") nominees are elected,
including the track record of value destruction at Imation Corp.
since the Clinton Group took control of Imation that includes
questionable self-dealing transactions.
We strongly urge shareholders to
follow ISS's and Glass Lewis' recommendations and vote FOR
Arlington's director nominees –
Eric F. Billings, J. Rock Tonkel, Jr., Daniel J. Altobello, Daniel E. Berce, David
W. Faeder, Peter A.
Gallagher, Ralph S. Michael,
III and Anthony P. Nader,
III.
Arlington shareholders are
reminded that their vote is extremely important, no matter how many
or how few shares they own. Arlington recommends that shareholders reelect
the Company's current leaders by voting the WHITE proxy card today
"FOR ALL" of Arlington's
highly-qualified and experienced director nominees.
Your Vote Is
Important, No Matter How Many or How Few Shares You Own
If you have any questions or need assistance voting,
please contact the firm assisting us in the solicitation of
proxies:
INNISFREE M&A INCORPORATED
Shareholders may call toll free:
1-888-750-5834 Banks and Brokers may call
collect: 212-750-5833
IMPORTANT We urge you
NOT to sign any gold proxy card sent to you by the Imation
Group.
If you have already done so, you have every legal right to
change your vote by using the enclosed WHITE proxy card to vote
TODAY -- by telephone, via Internet, or by signing, dating and
returning the WHITE proxy card in the postage paid envelope
provided.
|
About Arlington Asset Investment Corp.
Arlington Asset Investment Corp. (NYSE: AI) is a principal
investment firm that currently invests primarily in
mortgage-related and other assets. The Company is headquartered in
the Washington, D.C. metropolitan
area. For more information, please visit
www.arlingtonasset.com.
Important Additional Information
The Company, its directors and certain of its executive officers
are participants in the solicitation of proxies in connection with
the Company's 2016 Annual Meeting of Shareholders. The Company has
filed a definitive proxy statement and form of WHITE proxy card
with the U.S. Securities and Exchange Commission (the "SEC") in
connection with such solicitation of proxies from the Company's
shareholders. WE URGE INVESTORS TO READ THE DEFINITIVE PROXY
STATEMENT (INCLUDING ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND
ACCOMPANYING WHITE PROXY CARD CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Information regarding the names of the Company's directors and
executive officers and their respective interests in the Company by
security holdings or otherwise as of April
7, 2016, is set forth in the Company's definitive proxy
statement for its 2016 Annual Meeting of Shareholders, filed with
the SEC on April 18, 2016. Additional
information can be found in the Company's Annual Report on Form
10-K for the year ended December 31,
2015, filed with the SEC on February
16, 2016. These documents are available free of charge at
the SEC's website at www.sec.gov.
Shareholders will be able to obtain, free of charge, copies of
these documents, including any proxy statement (and amendments or
supplements thereto) and accompanying WHITE proxy card, and other
documents filed with the SEC at the SEC's website at www.sec.gov.
In addition, copies will also be available at no charge at the
Investors section of the Company's website at
http://www.arlingtonasset.com/.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Certain statements in this communication that are not historical
facts are forward-looking statements. Forward-looking statements
involve various important assumptions, risks and uncertainties.
Actual results may differ materially from those predicted by the
forward-looking statements because of various factors and possible
events. We discuss these factors and events, along with certain
other risks, uncertainties and assumptions, under the heading "Risk
Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2015, and in our other
filings with the SEC. We note these factors for investors as
contemplated by the Private Securities Litigation Reform Act of
1995. Predicting or identifying all such risk factors is
impossible. Consequently, investors should not consider any such
list to be a complete set of all potential risks and uncertainties.
Forward-looking statements speak only as of the date on which they
are made, and we undertake no obligation to update any
forward-looking statement to reflect circumstances or events that
occur after the date of the statement to reflect unanticipated
events. All subsequent written and oral forward-looking statements
attributable to us or any person acting on behalf of the Company
are qualified by the cautionary statements in this section.
1 Permission to use quotations neither sought nor
obtained.
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SOURCE Arlington Asset Investment Corp.