Ambac Financial Group Inc. appointed former American International Group Inc. Chief Financial Officer David Herzog to its board as the bond insurer works to fend off activist investor Canyon Capital Advisors.
Herzog, who is retiring from AIG next month, will join the board immediately along with Cornwall Capital Management LP’s Ian Haft, Ambac said Monday in a statement. Five shareholders representing 18.5 percent of Ambac’s stock agreed to vote in favor of Herzog and Haft at the annual meeting, the company said.
Herzog spent his last few months at AIG helping deal with activist investor Carl Icahn, who was pushing for a breakup of the insurer. Now, he’ll work with Ambac as it faces a proxy fight from hedge fund Canyon Capital, which proposed three nominees to the board after the 42 percent decline in the company’s stock last year.
“With the addition of Mr. Herzog, the Ambac board gains an independent director with direct experience, as AIG’s CFO, in one of the most complex restructurings in recent memory,” Ambac Chairman Jeffrey S. Stein said in the statement.
Ambac directors Eugene Bullis and Victor Mandel won’t stand for re-election, the company said in the statement. Canyon Capital has endorsed Frederick Arnold, CFO of ConvergEX Group; John Brecker, co-founder of Longacre Fund Management LLC; and Eugene Davis, chairman and CEO of Pirinate Consulting Group, for the board.
“We have been and continue to be in active dialogue with our shareholders,” Stein said Monday in a phone interview. “We are pleased with the significant support from five of our shareholders, and will continue the dialogue with all of our shareholders to explain why the board believes this is the right move for Ambac.”