U.S. News

AIG Weighed Pulling Share Offering Over Price: CEO


American International Group’s CEO Robert Benmosche told CNBC Tuesday that he considered pulling the insurance company's recent share offering when it looked like the price might not be much above the break-even point of $28.73 for US taxpayers.

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"We talked it through and we decided that we would go to $29 because it's important to close the door on the doubt about whether AIG will be here," Benmosche said in his first interview since the offering in late May.

AIG shares have been under pressure, falling 5.5 percent since its widely watched stock offering, which raised roughly $9 billion. Year-to-date the giant insurer is down 42 percent.

"Now what we've got to do is make sure we operate this company really well so that there's no doubt the American taxpayer will be able to sell their shares through the US Treasury and continually sell them for a profit," Benmosche said

The Future of AIG

AIG wil report earnings at the beginning of August, and potentially the US Treasury may sell more of its stake in the insurer after the third quarter, Benmosche said.

"The markets will dictate what has to be done here. Our feeling and the U.S. Treasury's feeling is the bigger the better, and do it at a point where it's clear that we have great strength in the company and a strong future. Remember, the Treasury is not trying to max out its investment. They're not waiting for a time to where you have a large investor to rotate out of a stock," he explained.

"This is a chance to make sure they [US Treasury] sell so they get the money back to the taxpayer plus a profit," added Benmosche.

The U.S. Treasury still owns a 77 percent stake in the insurer since the share offering, down from 92 percent after rescuing AIG during the 2008 financial crisis.