Before the end of the month, the U.S. government will seek buyers for its stake in
Although the U.S. Treasury and AIG confirmed on Wednesday their intention to sell approximately $9 billion in AIG stock, the Treasury, according to reports, may renege on the sale if it cannot be completed profitably.
Thanks to a federal bailout in 2008, 92% of A.I.G.’s common stock became the property of the U.S. Treasury, which now wants to sell 200 million of its 1.66 billion shares, leaving it with 77% of the company, according to an offering document filed Wednesday. At the same time, A.I.G. plans to sell 100 million new shares. The Treasury says it would have to raise a little more than $47.5 billion from AIG share sales just to break even. Currently, the price for AIG stock is estimated at $27.49, below the government’s break-even price of $28.50.
At AIG's annual meeting on Wednesday, a few shareholders shared their disappointment that the offering is moving ahead.“I think the directors have mismanaged this. You're now selling stock at one half of what it sold for a few months ago,” said Kenneth Steiner, who holds 600 shares of AIG, reportedly told the directors present. “What happened here is a real shame and real tragedy. It's only being made worse now by this dilutive offering.”
Other shareholders who spoke at the meeting noted their approval for the board's work and for CEO Robert Benmosche. Since the news emerged that the government was about to put AIG stock on the market, Wells Faro raised its rating of the insurer to “market perform.”
If the sale does go forward, its scale would
