Posted on 04 May 2009
Maurice R. "Hank" Greenberg in a Securities and Exchange Commission filing Friday said he would sell 12.9 million shares in American International Group Inc. (AIG) to Starr International Co. for what is expected to be at least $1.25 a share, bringing his days as major, direct shareholder in the insurer to end.
Mr. Greenberg is the head of Starr International and one of 12 voting shareholders of the privately held investment vehicle, which is run for the benefit of a foundation. Upon selling his stake, Mr. Greenberg would have virtually no direct economic interest in AIG, save for 71,000 shares held by family trusts.
Starr International was the largest single shareholder in AIG before the government bailed out the company last September, and it already holds 206 million shares. In exchange for the government rescue, taxpayers received a nearly 80% stake in the company. Mr. Greenberg, who served as CEO of AIG for nearly four decades, left the company in 2005 as it came under investigation for its accounting.
In addition to buying Mr. Greenberg's shares, Starr International would purchase 25.3 million shares in AIG from an entity called the Greenberg Joint Tenancy Co., 10.5 million shares from C.V. Starr & Co., another firm that Mr. Greenberg heads, and other shares from affiliated entities.
AIG and Starr International have been engaged in a long-running legal fight over what Starr International's stake in AIG can be used for, and the case has been slated for trial in June. It isn't clear whether the latest moves are related to that case.
A person familiar with the matter said the arrangements were part of a plan to give Mr. Greenberg's assets to charity in the future.
The filing said Starr International would buy each share for the closing price on the day before the deals are done, but added that the price would be at least $1.25 per share and that the price also would "not exceed a price to be mutually agreed upon by the parties." AIG shares closed Friday at $1.38.