When: Today, January 7, 2011

Where: CNBC’s "The Strategy Session"

Following is breaking news from CNBC’s

Kate Kelly

. Kelly broke the news on CNBC’s "The Strategy Session" today at 12pm ET and online at Here is a link to Kelly’s story on

All references must be sourced to CNBC.

Banks Jockeying to Lead AIG's 'Re-IPO'

Wall Street bankers are jockeying for position in what may be the year’s biggest public stock offering: the so-called “re-IPO” of American International Group.

The embattled AIG, which was essentially nationalized during the financial crisis, is expected to sell as much as $25 billion worth of stock to the public as early as March, say people familiar with the company’s plans, as the U.S. Treasury winds down its large stake in the insurer.

The exact details of the issue remain to be seen, and an AIG spokesman declined to comment for this story.

On Thursday, Jan. 13, potential underwriters will pitch representatives from the company and the Treasury in a “bake-off” for banking roles, say the people familiar with the plans. Meetings with bankers will be held at a law firm in Washington, D.C., say other people familiar with the matter.

Most of the firms are expected to send senior officials, according to people familiar with the companies’ plans, and bankers are currently poring over their CEOs’ schedules to see who can attend.

Among those expected to show, say these people, are Morgan Stanley chief James Gorman and Bank of America CEO Brian Moynihan.

J.P. Morgan Chase chief Jamie Dimon may also go, one of these people says.

RFPs, or requests for proposals from the Wall Street firms, were issued last night, according to two of these people, and AIG officials will make their decisions about the time frame of the government’s selldown and the size of the initial offering after entertaining the banks’ pitches.

AIG already trades on the New York Stock Exchange, but because the size of its float is quite small, the stock activity is relatively thin. Nonetheless, company shares have been on a tear of late, and have risen 115 percent in the past twelve months.

Two key questions for the underwriters, of course, are who will make the final selection of the bankers and what the deal fees are likely to be. One person familiar with AIG’s plans said that while the decision on bankers will involve input from both the insurer and the Treasury, the government is likely to have more say.

Fees, said this person, will likely be paid by AIG, but, as was the case with the recent offerings of General Motors and Citigroup, will be low relative to average stock offering fees because of the Treasury’s involvement.

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