Greenberg heads AIG takeover group

by Gill Montia

Story link: Greenberg heads AIG takeover group

Maurice Greenberg, the former chairman and chief executive of AIG, the worldwide insurer, is leading a group interest in acquiring additional shares in the company.

The parties involved believe there are opportunities to significantly improve AIG’s performance and strategic direction.

Talks covering a number of issues are currently underway with other stockholders and third parties, and it is understood that the sale of certain AIG operations is being discussed.

Mr Greenberg has been involved with AIG for over 40 years and was forced to stand down as chairman and chief executive of the company in 2005, following allegations of fraud.

Despite his remaining a major shareholder, analysts are not convinced that he is trying to regain control of the group.

AIG is scheduled to report its third-quarter results this week and shares in the group have been falling steadily on rumours that it has significant exposure to sub-prime investments.

However, a recent estimate from Lehman Brothers puts AIG’s potential sub-prime related writedown at between $3 billion and $4 billion.

The bank suggests that “A potential charge of this magnitude is not material to AIG’s annual EPS or capital position, in our view, although it presents headline risk”.

Earlier estimates from analysts put AIG’s sub-prime liability as high as $10 billion.