Anworth Sends Letter To Stockholders
Urges Stockholders to Vote WHITE Proxy Card Today "FOR" All Six of the
Company's Director Nominees
SANTA MONICA, Calif., April 30, 2014
SANTA MONICA, Calif., April 30, 2014 /PRNewswire/ --Anworth Mortgage Asset
Corporation (NYSE: ANH) today announced that it mailed on April 28, 2014 and
filed with the Securities and Exchange Commission on such date, a letter to
stockholders in connection with the 2014 Annual Meeting of Stockholders
scheduled for May 22, 2014.
The Anworth Board of Directors unanimously recommends that stockholders sign,
date and return the WHITE proxy card and discard any materials they may
receive from Western Investment, LLC.
The full text of the letter follows:
YOUR INVESTMENT IS AT RISK
AN ACTIVIST HEDGE FUND, WESTERN INVESTMENT LLC, WANTS CONTROL OF YOUR BOARD.
WESTERN IS FOCUSED ON LIQUIDATING YOUR COMPANY AND TERMINATING YOUR
INVESTMENT, INSTEAD OF BUILDING LONG-TERM VALUE AND RETURNS.
DO NOT GIVE CONTROL OF YOUR BOARD TO WESTERN.
VOTE THE ENCLOSED WHITE PROXY CARD TODAY AND PROTECT YOUR INCOME AND YOUR
April 28, 2014
At the 2014 Annual Meeting of Stockholders on May 22, 2014, you will have the
opportunity to make an extremely important decision regarding the future of
your investment in Anworth. You can protect your investment by voting today
the enclosed WHITE proxy card "FOR" all six of your Company's director
nominees: Lloyd McAdams, Lee A. Ault III, Joe E. Davis, Robert C. Davis,
Joseph E. McAdams and Mark S. Maron.
Since Anworth went public more than 16 years ago, despite several stock market
corrections, the worst recession in decades and a volatile interest rate
environment, your directors' investment strategy has generated long-term
growth and returns of 267% to its stockholders and, so far in 2014, Anworth's
stock price has increased approximately 30%. Your Board is focused on creating
long-term value and increasing the returns on your investment.
WESTERN IS ATTEMPTING TO OBTAIN CONTROL OF YOUR BOARD
WITHOUT PAYING YOU ANYTHING TODAY
Western acquired its 4.0% stake in Anworth during just the past four months.
Western wants control of your Board without paying you a control premium, or
anything, today, and without proposing any specific growth plan or operating
strategy. We believe Western is focused only on its own short-term trading
gains, rather than creating long-term value and income for Anworth and all of
Your vote is critical no matter how many shares you own! Please vote today
only the enclosed WHITE proxy card "FOR" all six of your Board's director
nominees. It is extremely important that you disregard the gold proxy card you
may already have received or will receive from Western. To vote "FOR" your
Board's six director nominees, you should complete, sign, date and return ONLY
the WHITE proxy card. Do not send back a gold proxy card. Do not hand Western
control of your Board.
YOUR BOARD HAS CREATED LONG-TERM VALUE
AND MARKET-BEATING RETURNS FOR ANWORTH'S STOCKHOLDERS
oSince Anworth's IPO, Our Investment Strategy Has Generated Long-Term
Returns on Investment That Have Outperformed Industry and Leading U.S.
Stock Indices. Over this 16-year, post-IPO period, the total cumulative
return on an investment in Anworth's common stock (including reinvested
dividends) has been approximately 267%; an 8.4% compounded annual return.
Over this period, our returns have significantly exceeded the FTSE NAREIT
Mortgage-REIT Index and major U.S. stock indices.1
oWe Have Generated Significant Returns During the Past Five Years
Notwithstanding Adverse Market Conditions. Your Board's hedged investment
strategy, which it successfully executed during one of the most
challenging stock market environments and prolonged economic recessions in
history, has produced a cumulative return on investment (including
reinvested dividends) of 68.5% over the past five years; an 11.0%
compounded annual return.
oOutstanding Stock Price Appreciation in 2014. Anworth's stock price has
increased approximately 30% so far this year. Giving effect to the
dividend payable to you on April 29, 2014, the total return of your
investment in Anworth in 2014 has been approximately 34% in less than four
YOUR BOARD IS TAKING SIGNIFICANT ACTION TO CREATE LONG-TERM VALUE AND INCREASE
YOUR INVESTMENT RETURNS
oWe recently increased the quarterly cash dividend on Anworth's common
stock to 14 cents per share; constituting an annualized dividend yield of
oWe recently increased Anworth's on-going share repurchase program by
10,000,000 shares. During the first quarter of 2014 Anworth repurchased
5,364,414 shares, and during the year ended December 31, 2013 Anworth
repurchased 7,646,429 shares. Because we repurchased these shares at a
discount, we created an increase in Anworth's net book value of
approximately $0.12 per share; constituting an aggregate increase of
approximately $16 million.
oWe recently announced a diversification strategy to position your Company
for increased future growth and investment returns.
oWe nominated Mark S. Maron, a new independent director with significant
real estate finance and capital markets experience, for election at the
2014 Annual Meeting.
oWe formed an independent Strategic Review Committee to assist with the
execution of our investment diversification strategy and explore long-term
value enhancement opportunities.
oWe engaged Credit Suisse to identify specific transactions to execute our
diversification strategy and to make recommendations regarding potential
capital markets transactions.
IF YOU GIVE WESTERN CONTROL OF YOUR BOARD,
YOU ARE PUTTING YOUR INVESTMENT INCOME AT RISK
oWe believe Western, an activist hedge fund, is focused only on its own
opportunistic short-term trading gains, rather than creating long-term
value and income for Anworth and all of its stockholders.
oDo you know that Western, a short-term stockholder, acquired its entire
4.0% stake in your Company in just the past four months and, without even
attempting to engage in a constructive or substantive dialogue with your
Board, immediately notified us that it wants to replace all of your
current directors? Western states in its proxy statement that if it
obtains control of your Board, its goal is to "maximize long-term value
for all stockholders." Do you realize that Western has never presented or
discussed with your Board any plan whatsoever to enhance long-term value
and increase returns on your investment?
oWestern boasts that it has been an activist stockholder in 38 companies.
In an appendix to its proxy statement it disclosed only one occasion where
it won a board seat. Western has no apparent experience in controlling
public company boards and its director nominees have no track record
managing a mortgage REIT.
oThe only specific transactions Western identifies as part of its plan to
"maximize long-term value for all stockholders" are the liquidation and
dissolution of your Company. The liquidation of Anworth is not a
"long-term" value maximizing strategy.
oWestern admits in its proxy statement that the liquidation of Anworth
would require a new, future stockholder vote; ensue over many months;
incur various administrative expenses; and first require the payment of
all obligations owed by Anworth to its creditors and to our manager. This
would reduce the net realizable value available for payment to
stockholders and likely eliminate any meaningful gain over today's trading
price of $5.48 per share.
TO DISTORT ANWORTH'S OUTSTANDING HISTORICAL FINANCIAL PERFORMANCE, WESTERN HAS
CHERRY-PICKED A SELF-SERVING TIMEFRAME AND HAS SELF-SELECTED "PEER" COMPANIES
TO MAKE ITS CASE
oThe 107/12year [ ]timeframe Western uses in its proxy statement to
criticize Anworth's historical performance is highly misleading. Western
fails to mention that:
oSince Anworth's IPO over 16 years ago, your Board has delivered a
total return of 267% to stockholders, averaging 8.4% compounded
oOver the past five years, which included one of the most difficult
stock market environments and prolonged economic recessions in
history, a continued investment in Anworth has produced a 68.5%
cumulative return on investment (including reinvested dividends), an
11.0% compounded annual return.
oAnworth's stock price has increased approximately 30% so far in 2014.
oWestern constructed its own "peer group" to criticize Anworth's
performance relative to other Mortgage REITs. The fact is that Anworth's
267% total return since inception is dramatically better than the 66%
total return of all issuers included in the FTSE Nareit Mortgage-REIT
Index over the same period.
PROTECT YOUR INVESTMENT INCOME AND THE LONG-TERM VALUE OF YOUR ANWORTH STOCK.
VOTE TO ELECT ALL SIX OF YOUR BOARD'S DIRECTOR NOMINEES
VOTE THE WHITE PROXY CARD TODAY!
Your Board and management team have one overarching focus - - creating
long-term value and increasing the return on your investment. We urge you to
protect the value of your investment by affirmatively voting "FOR" the
election of all of your Board's six director nominees.
DISREGARD ANY GOLD PROXY CARD AND PROXY MATERIAL YOU RECEIVE FROM OR ON BEHALF
Your Board urges you not to sign or return any gold proxy card you may already
have received or that you will receive from or on behalf of Western. Instead,
your Board urges you to complete, sign, date and return only the WHITE proxy
card enclosed with this letter and return it in the pre-addressed envelope
provided. You may also refer to the instructions on your WHITE proxy card to
vote your shares via the Internet or by phone.
Your vote is extremely important, no matter how many or how few shares you
own. We urge you to vote today by telephone, online, or by signing and dating
the enclosed WHITE proxy card and returning it in the postage-paid envelope
provided. Please do not return or otherwise vote any gold proxy card sent to
you by Western.
* * * * * * * * * * * * *
We thank you for your continued support.
Your Board of Directors
If you have questions or need assistance voting your WHITE proxy card, please
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, New York 10016
Call Collect: (212) 929-5500
Toll-Free (800) 322-2885
About Anworth Mortgage Asset Corporation
Anworth is an externally-managed mortgage real estate investment trust. Our
principal business is to invest primarily in securities guaranteed by the U.S.
Government, such as Ginnie Mae, or guaranteed by federally sponsored
enterprises, such as Fannie Mae or Freddie Mac. We seek to generate income for
distribution to our shareholders primarily based on the difference between the
yield on our mortgage assets and the cost of our borrowings. We are managed by
Anworth Management, LLC, or the Manager, pursuant a management agreement. The
Manager is subject to the supervision and direction of our Board of Directors
and is responsible for (i) the selection, purchase and sale of our investment
portfolio; (ii) our financing and hedging activities; and (iii) providing us
with management services and other services and activities relating to our
assets and operations as may be appropriate. Our common stock is traded on the
New York Stock Exchange under the symbol "ANH." Anworth is a component of the
Russell 2000® Index.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
This news release may contain forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are based upon our current expectations
and speak only as of the date hereof.
Forward-looking statements, which are based on various assumptions (some of
which are beyond our control) may be identified by reference to a future
period or periods or by the use of forward-looking terminology, such as "may,"
"will," "believe," "expect," "anticipate," "assume," "estimate," "intend,"
"continue," or other similar terms or variations on those terms or the
negative of those terms. Our actual results may differ materially and
adversely from those expressed in any forward-looking statements as a result
of various factors and uncertainties, including but not limited to, changes in
interest rates; changes in the market value of our mortgage-backed securities;
changes in the yield curve; the availability of mortgage-backed securities for
purchase; increases in the prepayment rates on the mortgage loans securing our
mortgage-backed securities; our ability to use borrowings to finance our
assets and, if available, the terms of any financing; risks associated with
investing in mortgage-related assets; changes in business conditions and the
general economy, including the consequences of actions by the U.S. government
and other foreign governments to address the global financial crisis;
implementation of or changes in government regulations affecting our business;
our ability to maintain our qualification as a real estate investment trust
for federal income tax purposes; our ability to maintain an exemption from the
Investment Company Act of 1940, as amended; risks associated with our home
rental business; and the Manager's ability to manage our growth. Our Annual
Report on Form 10-K and other SEC filings discuss the most significant risk
factors that may affect our business, results of operations and financial
condition. We undertake no obligation to revise or update publicly any
forward-looking statements for any reason.
(1) S&P 500, Dow Jones Industrial Average and NASDAQ Composite Index
Contact: John T. Hillman @ 310/255-4438 or 310/255-4493
SOURCE Anworth Mortgage Asset Corporation
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