American International Group (AIG) said it will buy back up to $3 billion of its stock from the U.S. Treasury Friday as part of the government's offering of $4.5 billion of the insurer's shares on the open market.
The stock sale will move the U.S. government closer to a point where it would own just half of the insurer's shares outstanding. The Treasury Department currently holds a 61% stake in the company. AIG said that Citigroup (C), Deutsche Bank (DB), Goldman Sachs (GS), and JPMorgan Chase (JPM) are the banks working on the stock offering.
Shortly after Lehman Brothers filed for bankruptcy protection in September 2008, AIG was also teetering on the edge. The U.S. government offered AIG an $85 billion lifeline that eventually ballooned to $182 billion.
AIG's stock was halted mid-day Friday following the Treasury news, but shares moved higher once they resumed trading. The stock finished the day up 1.6%. It has been a good year so far for AIG. Shares have gained 35% in 2012. On Thursday, AIG reported a second-quarter profit of $2.33 billion, ahead of analysts' expectations.
The rebound for AIG has been good for the government and taxpayers as well. The stock closed Friday at $31.34. That's nearly 10% higher than the Treasury Department's break-even price of $28.72 a share for its investment.
-- CNNMoney's Ben Rooney contributed to this article.
|Deficit for 2017 hits $666 billion|
|Fundraiser for burned marijuana farms shut down|
|ClassPass founder just wanted to book a dance class|
|Donald Trump bankruptcy: Everything you want to know|
|Jeff Bezos is having a moment|