Uncle Sam’s 12% Exit from AIG ZT

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AIG today detailed plans for a stock offering that is the first step for the government to flee its 92.1% ownership in the company.

As our Deal Journal colleagues had reported, the stock sale is likely to fetch far less money that what government officials had expected.

According to a regulatory filing today, the AIG sale totals 300 million shares. And while AIG didn’t set an expected per-share price for its stock, the 300 million shares are valued at about $8.9 billion based on AIG’s closing stock price Tuesday of $29.62. The government needs a per-share price of about $28.70 a share to break even on its stake in AIG. (The offering price is likely to be at a discount to the market price.)

The U.S. government plans to sell just 200 million of its 1.66 billion shares of AIG — or just 12% of taxpayers’ holdings in AIG. It’s not exactly a great advertisement for AIG: “We’re slightly less majority-owned by Uncle Sam!”