AIG Still In Reaction Mode…..

This still won’t get it done….Icahn (and shareholders) are looking for $10’s of billions in activity. Hancock seems to be refusing to acknowledge that reality. Yes, this is a move in the right direction but not at the end of the day what is needed. They still have $1.6B in ownership in PICC. Based on the comments below, they have no plans of liquidating the stake anytime soon which means this is simply a short term stop gap measure that he hopes placates people.

It won’t, and if anything, I think it will piss people off (I know it did me a bit). Is the thought process to do “something” to shut people up? Or maybe they think this will divert attention from the real issue? I am concerned it increasingly seems as though there is no near term plan to realize value and management honestly thinks that they can cruise through the next two years at their own pace stock price be damned. While they scramble to come up with something to announce before Q4 results are released are they throwing us some crumbs now?

Moves like this really annoy me. The stock has been well below value for a years now. Why wasn’t this done in October when the stock was in the $50’s? A boat load more shares could have been bought back at prices ~$10/share lower than were the stock is now. This is what I mean when I say there does not seem to be a plan and they are simply reacting to Icahn now. When Benmosche decided he wanted to get rid of the government’s stake, he used every penny of the Maiden Lane sales to buyback multi-billion dollar slugs of stock from the government as soon as he got the cash. What is the delay on the part of Hancock? If these assets are “non-core”, why aren’t they bending over backwards to sell them and gobbling up dirt cheap stock?

There is so much more that could be done……..get it done

The release:

AIG Announces Pricing of the Sale of Ordinary H Shares of PICC Property and Casualty Company Limited

NEW YORK–(BUSINESS WIRE)–Dec. 7, 2015– American International Group, Inc. (NYSE:AIG) announced today that it has priced the sale of 361 million ordinary H shares of PICC Property and Casualty Company Limited (PICC P&C) by means of a placing to certain institutional investors.

Upon the closing of the placing, which is scheduled for December 10, 2015, and is subject to customary closing conditions, AIG will receive gross proceeds of approximately US$751.8 million, based upon a purchase price of HK$16.14 (approximately US$2.08) per share. Thereafter, AIG will continue to be the largest holder of PICC P&C H shares, with a position of approximately 851 million shares, representing 5.74 percent of the total issued share capital of PICC P&C.

“During our third quarter earnings call, we disclosed that narrowing our focus is one of AIG’s four strategic priorities,” said Peter D. Hancock, President and Chief Executive Officer of AIG. “By continuing to de-risk our position in PICC P&C, we are focusing AIG’s capital in our core markets and enhancing our financial flexibility. We continue to greatly value our strategic partnership with PICC P&C.”