Treasury Sells More AIG Shares Than Planned, a Great Offering for Taxpayers

It’s official! Not only was the U.S. Treasury sale of American International Group Inc. (NYSE: AIG) shares an overwhelming success, the AIG share overallotment was exercised as well. Now the taxpayers are not only whole on their bailout capital. They only own a fairly small minority stake.

The Treasury now expects to receive an additional $2.7 billion from its overallotment shares. The underwriters have already exercised their over-allotment option in full, so another 83.1 million shares of AIG common stock were sold at $32.50 per share.

The offering of 553.8 million shares at $32.50 per share brought in proceeds of roughly $18.0 billion. Combined with the exercise of the over-allotment option, the Treasury’s sale proceeds are now about $20.7 billion and the total number of shares sold is roughly 636.9 million shares.

Today’s secondary offering will have taken the Treasury’s stake in AIG from 53.4% all the way down to about 15.9% of AIG’s common stock outstanding.

AIG may still be hated by much of the public, but the taxpayers are now profitable and still own a rather large stake to boot.

If you want to know how successful this offering was, the $32.50 price was never even hit today as the low was $32.56. Shares are down only 0.8% at $33.04 with just under an hour to go.

JON C. OGG