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NEW YORK (

TheStreet

) -- In a small step toward unwinding the government's significant stake in

American International Group

(AIG) - Get American International Group, Inc. Report

, the company and the U.S. Treasury priced an offering of 300 million of the insurer's common shares at $29 each, generating $8.7 billion in proceeds.

AIG is selling 100 million of the shares, while the Treasury is offering the other 200 million shares. According to the

Wall Street Journal

, the Treasury's breakeven point on the stock is $28.73 so the pricing, which was at the low end of a tight $29-$30 range, does provide a small profit for taxpayers.

The sale reduces the Treasury's stake in AIG, which dates back to the company's massive $85 billion bailout back in September 2008, to 76.7% from 92.1%, the

WSJ

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said, adding that the Treasury could opt to sell more stock in the next few days, aiming to reduce the stake to 74%.

AIG shares closed Tuesday's regular session at $29.46, down 1.7%, and the stock drifted lower in after-hours action, falling another 27 cents to $29.18 on volume of more than 660,000. Wall Street is bearish on the shares with five of the seven analysts covering the stock at either hold (4) or underperform (1).

On May 5, AIG reported its fiscal first-quarter results, posting a surprise profit of $1.30 a share on revenue of $17.44 billion.

--

Written by Michael Baron in New York.

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Michael Baron

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