The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
New York / BLOOMBERG
American International Group Inc. raised $1.25 billion selling shares of Chinese insurer PICC Property & Casualty Co. near the low end of a marketed range.
The largest commercial insurer in the U.S. and Canada sold 740 million shares of PICC P&C at HK$13.08 apiece, after earlier offering them at HK$13.06 to HK$13.35, according to terms for the deal obtained by Bloomberg. The price represents a 7.9 percent discount to the stock’s last close.
AIG CEO Peter Hancock, under pressure from activist investors John Paulson and Carl Icahn to boost returns and simplify operations, announced in January he was creating a new legacy portfolio. That book includes about a quarter of the company’s equity and is comprised of discontinued businesses and investments that AIG plans to exit. The PICC P&C holding is one of the easier ones to sell, given that the stock is publicly traded in Hong Kong.
“On the legacy portfolio, we think that the right metric for success is how quickly we can extract capital by either divestitures, reinsurance, or other efficient runoff methods without giving away too much of our book value,†Hancock said in a Jan. 26 presentation. The CEO plans to free up about $9 billion as part of a two-year plan to fund $25 billion of share buybacks and dividend payments.