AIG Jumps as Chairman Miller Says Citigroup, GM Show Path to Independence
American International Group Inc. posted the biggest gain in the Standard & Poor’s 500 Index as Chairman Steve Miller said he is encouraged about the insurer’s prospects for regaining independence after the U.S. sold stakes in other bailed-out companies.
The Treasury Department sold $10.5 billion of Citigroup Inc. shares last week and received $13.6 billion from last month’s offering of General Motors Co. shares.
“Those are good precedents, which give increased confidence,” Miller said today in an interview on Bloomberg Television’s “InBusiness With Margaret Brennan.” AIG jumped $3.25, or 6.7 percent, to $51.77 at 4:15 p.m. in New York Stock Exchange composite trading.
Treasury, which invested more than $49 billion to prop up AIG, plans to convert its preferred stake into common stock by March 15 and will sell the shares to private investors. The U.S. may need one to two years, depending on market conditions, to sell all of its AIG shares, which will be more than 90 percent of the stock in the New York-based insurer, Miller said.
“Treasury and ourselves are anxious to complete that job,” Miller said. “Now the markets are open, investors have confidence in both the board and management of AIG.”
AIG has surged about 73 percent this year in New York trading. The company sold $2 billion of bonds in November in its first debt offering since the 2008 bailout that swelled to $182.3 billion, including assistance from the Federal Reserve.
Benmosche ‘Doing Terrific’
The insurer disclosed in October that Chief Executive Officer Robert Benmosche, 66, is undergoing “aggressive” treatment for cancer and that Miller, 69, is available to be interim CEO if needed. AIG’s board had begun succession planning before Benmosche’s diagnosis because the CEO intended to retire in 2012, he told staff.
Benmosche is “doing terrific,” Miller said. “This is a person who’s showing no signs at this point of any diminution in his health or energy.”
Miller replaced Harvey Golub as chairman of AIG in July after Benmosche threatened to leave the company unless Golub resigned. Miller oversaw the bankruptcy of auto-parts supplier Delphi Corp. and helped Chrysler Corp. return to profitability after taking government loans.
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