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Fairholme Capital Management to Discuss AIG's Capital Structure

Posted on 11 Jan 2011

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The largest private shareholder of American International Group Inc., Fairholme Capital Management, disclosed Monday it intends to engage in discussions with the insurer's management, board and shareholders regarding the company's capital structure.

In a filing with the Securities and Exchange Commission, AIG announced the plan by Fairholme, which owns 44.3 million shares, or 31.6% of the company's stock that isn't owned by the U.S. government. The asset manager is run by Bruce Berkowitz.

The U.S. Treasury is auditioning bankers this week to manage a public offering of a large chunk of its stake in AIG. The insurer received a $182.3 billion bailout from the U.S. government to prevent a near-collapse in 2008 from bad bets made on the housing market.

Berkowitz began to amass his stake in AIG early this year. He said he began to build the stake as it became clear to him that AIG would repay its government bailout.

An AIG spokesman declined to comment. A representative for Fairholme didn't immediately respond to a request for comment.