The U.S. Treasury Department has begun an offering of $4.5 billion in stock of bailed-out insurer American International Group Inc. (AIG:US)
AIG plans to buy as much as $3 billion of the stock, the Treasury said in a statement today.
The sale is the fourth offering of New York-based AIG’s stock by the Treasury Department, which took a majority stake (AIG:US) as part of a 2008 bailout. The holding was cut to 61 percent from 92 percent in the first three sales, which raised more than $17 billion for the U.S.
“Ongoing asset sales and share buybacks are a near-term catalyst for AIG,” Jimmy Bhullar, an analyst at JPMorgan Chase & Co., wrote in a research note today.
AIG shares were trading at $31.16 in New York when trading was halted today before the announcement. The first two offerings (AIG:US) were priced at $29 a share, and the third at $30.50. The government needs to average about $28.72 over all share sales to break even on its investment.
Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. (GS:US) and JPMorgan are banks working on the sale, according to the statement. Underwriters have a 30-day option to buy as much as $675 million more in AIG stock from the Treasury.
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