Hundreds of investors attended the flagship New York City luncheon as part of the road show for American International Group’s re-IPO Tuesday, including a slew of prominent hedge funds.
The insurer reserved a ballroom at the New York Hilton to make its pitch, according to investors and others who have been briefed on the event. Chief executive Bob Benmosche, CFO David Herzog, and Chartis unit CEO Peter Hancock were in attendance, along with a handful of others from the AIG management team.
An AIG spokesman declined to comment on the company’s plans for the event.
On the investor side, more than a dozen prominent hedge funds were slated to attend, including Anchorage Capital, Avenue Capital, Eton Park Capital, Maverick Capital, Millennium Partners, Moore Capital, Och-Ziff Capital, and Paulson Management. They were joined by other institutional money managers and investment advisors like Sanford C. Bernstein and Oppenheimer & Co.
Underwriters have historically been reluctant to give hedge funds prominent positions in large public offerings, given their reputation for flipping shares quickly after a deal comes to market. But in recent years, hedge funds have become an increasingly standard part of public-offering books, say bankers, partly because of their growth in popularity and presence and partly because more funds are holding individual company stock for the longer term.
One flashpoint as investors and AIG management gathered today was price. In recent weeks, officials at the U.S. Treasury, which is selling 200 million of its AIG shares in the offering, have battled with the bankers on the deal over what price to attach to the stock being sold in the current secondary sale (nicknamed the re-IPO because the current public float is so small). As the stock earlier in May, some investors were clamoring for a price just north of $20 per share, whereas Treasury and AIG management felt strongly that the company’s stock was worth more than $30 per share.
Since then, markets appear to have turned in the insurer’s favor, however. Since hitting a low of roughly $29 about a week ago, AIG shares have risen to closer to $31 apiece.
Official AIG pricing is currently scheduled for May 24, say people familiar with the plans.
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