Updated with afternoon market action, economic news, and comment from Sterne Agee analyst John Nadel.
NEW YORK ( TheStreet) -- American International Group (AIG - Get Report) on Thursday announced that it was selling up to $2 billion in shares of AIA Group Ltd. to a group of private investors, partially funding a new authorization for AIG to buy back up to $5 billion in common shares.
AIG spun-off AIA Group of Hong Kong in 2010, netting about $20.5 billion at that time, and selling another $6 billion worth of the shares in March.
AIG's $5 billion share repurchase authorization is expected to be acted upon quite soon, through another deal to repurchase common shares held by the U.S. Treasury. Following a repurchase of about $3 billion government-held shares in August, the government was left holding 53% of AIG's shares, which were worth about $31.9 billion, as of Wednesday's close, at $34.81.Deutsche Bank analyst Joshua Shanker early on Thursday reiterated his "Buy" rating for AIG, while raising his price target by $2 to $42, saying that he now expects the next government sale of AIG shares "to be a large offering," that "AIG will be a significant repurchase," and that "a repurchase of $10 billion would be