NEW YORK (
shares jumped Tuesday following
that the company has dropped plans for an initial public offering of its Chartis property casualty division.
The stock was gaining nearly 11% to $31.13 in recent trades. The high for the session is $31.94. Volume was a brisk 20.4 million, closing in on the issue's trailing three-month average daily churn of 24.4 million.
In backing away from the planned IPO, AIG CEO Robert Benmosche told employees that he considers Chartis to be a core business,
, citing two unidentified sources.
AIG is the largest recipient of federal bailout money in the financial crisis,
owing the government $70 billion, according to ProPublica
puts the size of the AIG bailout at $182 billion. In any case, the government owns about 80% of the company, and many followers of AIG have suggested the United States will do far better on its investment if the company takes its time selling assets, allowing markets to recover.
That has been the strategy of Benmosche, who has put off at least two planned asset sales since taking over leadership of AIG in August,
There is reason to believe the move makes sense in the case of Chartis.
, suggesting doing an IPO now would fetch AIG less than the unit might be worth a year or two down the line.
The AIG surge took place with other large financials mixed in Tuesday's session.
Bank of America
was up slightly while
were both down about 1.5%.
The Financial Sector Sector SPDR
ETF was roughly flat.
Written by Dan Freed in New York