US Government almost half-way out.
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AIG Stock Priced at $30.50 a Share in $5 Billion Offering
Aug. 3 (Bloomberg) -- American International Group Inc. shares were priced at $30.50, below today's closing value on the New York Stock Exchange, as the U.S. cut its stake in the Treasury Department's fourth offering of the company's stock.
The U.S. raised $5 billion, with New York-based AIG buying $3 billion of the stock, the department said in a statement today. AIG closed at $31.34 at 4:15 p.m. in New York today.
The sale cuts the government stake to 55 percent from 61 percent. Chief Executive Officer Robert Benmosche has been repurchasing stock to help the company regain independence and increase the value of remaining shares. AIG has raised funds for repurchases by divesting assets including part of its stake in Hong Kong-based insurer AIA Group Ltd.
"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 before the announcement.
The first two offerings 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, which was part of a 2008 bailout that swelled to $182.3 billion.
Bank of America Corp., Barclays Plc, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan, Macquarie Group Ltd., Morgan Stanley, UBS AG and Wells Fargo & Co. led the offering, according to the statement. Underwriters have a 30-day option to buy as much as $750 million more in AIG stock, the department said.
Profit Rebound
Including today's offering, the U.S. has raised more than $22 billion in AIG share sales, reducing the government's outstanding investment to about $25 billion. The U.S. holding was cut to 61 percent from 92 percent in the prior three sales, the first of which was in May of 2011.
Book value per share, a measure of assets minus liabilities, climbed to $60.58 as of June 30 from $57.68 on March 31, the company said yesterday when it posted its third- straight quarterly profit. Buybacks contributed $1.03 to the increase in book value per share in the quarter, Chief Financial Officer David Herzog said on a conference call today.
To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net
To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net
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