The insurer announced Thursday that it will sell a majority of its 59% stake in reinsurer
to the public in a secondary offering.
AIG owns about 39.1 million shares of Transatlantic and plans to shed 26 million shares, reducing its holdings to about 19.7%. Underwriters will have the option to purchase an additional 3.9 million shares to cover over-allotments.
Based on Transatlantic's closing stock price of $37.87 on Wednesday, AIG would raise about $984.6 million by selling the 26 million shares. Including over-allotments, AIG could rake in a total of $1.13 billion.
The company expected to easily get rid of Transatlantic stake as it attempts to pay back its massive bailout, but the task has proven to be more difficult in the weak economy. AIG was forced to redraw its divestiture plans and instead turned to a public offering.
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