AIG shares tumble on worry over Greenberg plans
NEW YORK (Reuters) - Shares of American International Group (AIG.N) tumbled Friday on fears that former CEO Maurice "Hank" Greenberg is considering selling off his 12 percent stake in the world's largest insurer.
A group led by Greenberg said in a regulatory filing that it had hired an investment bank, Perella Weinberg Partners, to advise it on the stake.
"Greenberg is trying to make up his mind whether to let go of his AIG holdings or not, and he's seeking Perella's advice," said Donald Light, an analyst with Celent LLC. "My guess is he'll probably let them go."
In the Friday filing, Greenberg said he and his companies were seeking advice on "the business, operations, financial condition and underlying value" of AIG.
The news sent AIG shares plunging to a 12-month low. The shares were down $2.88, or 5 percent, to $51.39 in afternoon trade on the New York Stock Exchange after falling as low as $50.57 earlier.
Through a spokesman, Greenberg declined to comment, as did AIG and Perella Weinberg. Greenberg's stake in AIG is worth about $17 billion.
Greenberg has been at war with AIG since February 2005, when he was ousted as CEO amid an accounting scandal. There have been frequent lawsuits between the two sides.
In November, Greenberg said in a regulatory filing that he was seeking "strategic alternatives" for AIG, a phrase often used to indicate a takeover or proxy fight.
But in December, the New York State Department of Insurance told Greenberg he had violated state insurance laws because he had not sought its permission to take control of the company, according to a subsequent filing.
SOVEREIGN FUND CONTACTS
Perella Weinberg is a closely held advisory and asset management firm launched by veteran deal maker Joseph Perella. in 2006. It is reported to have close contacts with sovereign funds, including the Dubai government's investment arm.
Greenberg's stake in AIG includes substantial holdings of his own; holdings by Starr International, a private investment firm where he is chairman; and holdings by C.V. Starr. Greenberg is CEO of C.V. Starr.
Greenberg's control of the Starr International shares is disputed by AIG, which has filed suit to gain control of those shares, alleging they were supposed to be used as compensation for AIG employees.
(Reporting by Ed Leefeldt, Mark McSherry and Doris Frankel; Editing by John Wallace)
