(Adds background on AIG and Transatlantic and includes fresh stock prices)
DOW JONES NEWSWIRES
American International Group Inc. (AIG) plans to sell about
two-thirds of its stake in reinsurer Transatlantic Holdings Inc.
(TRH) as the ailing insurance giant looks to pare assets and raise
capital to pay back the U.S. government for its assistance.
The stock sale comes as a number of financial institutions
recently have been taking advantage of recent stock market strength
to raise funds to boost capital levels and repay government rescue
funds.
After the sale, AIG's stake in Transatlantic would be reduced to
20% from 59% through the sale of at least 26 million shares. If
investor demand is sufficient, AIG's stake could fall to as low as
14%.
Transatlantic has been a long-time holding of AIG. When the
company announced plans in 1990 to go public, AIG held a 41% stake.
By 1999, the stake grew to 56%.
Transatlantic's shares closed at $37.87 on Wednesday and are off
roughly 45% since last year. But the shares are up from a 12-year
low of $26.16 struck in March.
AIG shares closed Wednesday at $1.66 and didn't trade
premarket.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com