Page 11 of 14 – SEC Filing
EXHIBIT B
STATEMENT OF HUBER CAPITAL MANAGEMENT,
LLC
Executive Summary
| · | Huber Capital Management, LLC intends to vote against Teekay Tankers’ (TNK) pending acquisition of Tanker Investments Ltd. (TIL). |
| · | Huber Capital sees a significant gap between Teekay Tankers’ intrinsic value and its current share price. |
| · | Teekay Tankers’ Board made multiple related-party transactions over the past 18 months while TNK’s equity price has fallen approximately 74.9%. |
| · | Lack of an independently controlled Board has contributed to a capital allocation strategy that favors related party transactions and asset gathering, all of which is financed through repeated share issuances and assumption of debt. |
Huber Capital Management (Huber Capital)
is communicating, under the current proposal, its intention to vote against the proposed issuance of Class A shares. Huber Capital
is currently a holder of approximately 10.2% of the Class A shares outstanding. The pending transaction requires approval by a
majority of Class A Shareholders to authorize the issuance of additional Class A shares above TNK’s currently authorized
limit. Our decision to vote against the transaction has been influenced by what we believe to be the continued sub-optimal capital
deployment strategy of paying as much or more than any other potential buyer for assets controlled by or related to TNK’s
parent company Teekay Corporation.
While Huber Capital fully understands TNK’s
current liquidity profile, we believe that Class A shareholders would recognize a materially higher rate of return on capital over
the long run if capital were deployed through share repurchases as opposed to purchasing related party assets at prices at or above
what others are willing to pay. The control nature of Teekay Tankers’ dual share class structure prevents Class A holders
from fully exercising their pro rata share on proxy decisions, however, this is our last best chance to convince the board to act
in our best interest and not in what we believe to be the best interest of other Teekay Corporation related parties.
Poor share price performance has gone hand
in hand with poor capital allocation at Teekay Tankers. Since the fourth quarter 2015 Teekay Tankers has issued over 11 million
shares of Class A Equity through a Continuous Offering Program and 13.8 Million of super voting Class B Shares for an acquisition
of a related party entity. Now TNK is proposing the issuance of an additional 88.9 million Class A Shares for the TIL transaction.
The equity issuances since the fourth quarter
2015 and the resulting liquidity generated, in our view, has been mostly used to fund related party transactions. In December 2015,
Teekay completed a related-party acquisition of two purpose-built Lightering Aframax tankers from a deeply liquidity-constrained
sister entity. This transaction further leveraged TNK’s balance sheet and used up $30 million of Teekay Tankers’ liquidity.
This occurred during a period that the board and management repeatedly claimed that their number one priority was to deleverage
the balance sheet.
The following is a list of events over
the last 18 months detailing what we believe are Teekay Tankers’ missteps when it comes to capital allocation:
November
2015 – Teekay Tankers implemented a new continuous offering program (COP) under which the Company may issue new common
shares at market prices up to a maximum aggregate amount
of $80 million. During the fourth quarter of 2015, the Company sold an aggregate of 2,045,000 common shares under the COP, generating
net proceeds of approximately $14.3 million. This capital was ultimately used for the December acquisition of two related party
vessels.
