American International Group's (NYSE:AIG) Board of Directors declared a dividend of about 75 million warrants to acquire common stock of the company at $45 a share.
Canaccord said, "The insurer announced on Friday that its Board of Directors has conditionally declared a dividend of approximately 75 million warrants to purchase shares of AIG common stock at $45 per share, to be distributed on January 19, 2011. The shares will be given to AIG’s common shareholders of record as of January 13, 2011, although the U.S. Department of the Treasury will not receive warrants in this distribution. The warrants are being issued as part of a series of integrated transactions to recapitalize AIG initially announced on September 30, 2010. “This marks continued progress for AIG towards completing the recapitalization and furthering our work to repay the U.S. taxpayer,” said Robert H. Benmosche, AIG President and Chief Executive Officer. “We are working diligently to complete this plan in the coming weeks.” Their issuance is conditional on AIG and its government overseers confirming by January 12 that they will close on an exit strategy plan on January 14. That plan will see AIG repaying its debt to the Federal Reserve Bank of New York and transferring some obligations to the Treasury Department that will be repaid over time with proceeds from asset sales. If these conditions are satisfied, AIG common shareholders will be issued 0.533933 warrants for every share of AIG common stock owned on the record date."
AIG closed Monday at $57.39, losing $3.79, or 6.19 percent.
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