Here is a great mega news for AIG!!!! The US Treasury states that it will sell $18B worth of AIG common stocks and it will also sell $2.7 bil common stock to cover possible over-allotments.
From http://www.treasury.gov/press-center/press-releases/Pages/tg1700.aspx
“WASHINGTON – Today, the U.S. Department of the Treasury announced that it has launched an underwritten public offering of $18.0 billion of its American International Group, Inc. (AIG) common stock. AIG has indicated that it intends to purchase up to $5.0 billion of the common stock sold by Treasury in this offering at the initial public offering price. Treasury will also grant to the underwriters in the offering a 30-day option to purchase up to an additional $2.7 billion in common stock from Treasury to cover over-allotments, if any.
Citigroup, Deutsche Bank Securities Inc., Goldman, Sachs & Co., and J.P. Morgan Securities LLC have been retained as joint global coordinators. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. have been retained as joint bookrunners for the offering.”
So far, AIG will buy $5B from Treasury, and the rest ~15B will be consumed by banks and public. After this sale (let us assume only $18 Bil sale), treasury’s share of AIG stock will shrink from 53% to 22%, given today’s stock price of $33.99.
I anticipate that the market response to this news will be hugely positive tomorrow. Institutional investors will start to jump into the boat from now on. No wonder AIG CEO bought a lot of shares last week.
About Timeless Investor
My name is Samual Lau. I am a long-term value investor and a zealous disciple of Ben Graham. And I am a MBA graduated in May 2010 from Carnegie Mellon University. My concentrations are Finance, Strategy and Marketing.
TimelessInvestor
$18+ Bil AIG common stock for sale!!
Here is a great mega news for AIG!!!! The US Treasury states that it will sell $18B worth of AIG common stocks and it will also sell $2.7 bil common stock to cover possible over-allotments.
From http://www.treasury.gov/press-center/press-releases/Pages/tg1700.aspx
“WASHINGTON – Today, the U.S. Department of the Treasury announced that it has launched an underwritten public offering of $18.0 billion of its American International Group, Inc. (AIG) common stock. AIG has indicated that it intends to purchase up to $5.0 billion of the common stock sold by Treasury in this offering at the initial public offering price. Treasury will also grant to the underwriters in the offering a 30-day option to purchase up to an additional $2.7 billion in common stock from Treasury to cover over-allotments, if any.
Citigroup, Deutsche Bank Securities Inc., Goldman, Sachs & Co., and J.P. Morgan Securities LLC have been retained as joint global coordinators. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. have been retained as joint bookrunners for the offering.”
So far, AIG will buy $5B from Treasury, and the rest ~15B will be consumed by banks and public. After this sale (let us assume only $18 Bil sale), treasury’s share of AIG stock will shrink from 53% to 22%, given today’s stock price of $33.99.
I anticipate that the market response to this news will be hugely positive tomorrow. Institutional investors will start to jump into the boat from now on. No wonder AIG CEO bought a lot of shares last week.
About Timeless Investor
My name is Samual Lau. I am a long-term value investor and a zealous disciple of Ben Graham. And I am a MBA graduated in May 2010 from Carnegie Mellon University. My concentrations are Finance, Strategy and Marketing.