10:05 AM
Dimon, Gorman, Moynihan pitch for AIG share sale
Addison Ray
By Ben Berkowitz
NEW YORK | Thu Jan 13, 2011 12:38pm EST
NEW YORK (Reuters) - Some of the United States' top bankers descended on a law firm in midtown Manhattan on Thursday to make a pitch for managing what could be one of the largest share sales in history -- a secondary offering for bailed-out insurer American International Group Inc.
JPMorgan Chief Executive Jamie Dimon was among the executives attending the meeting. Dimon entered the building of law firm Davis Polk & Wardwell LLP just after 9:30 a.m. EST (1430 GMT) in New York. Asked how the meeting went as he left, Dimon laughed and said: "How'd what go?"
Morgan Stanley CEO James Gorman left the building shortly after Dimon's arrival. The bankers on Gorman's team were carrying thick blue folders adorned with the U.S. flag. One of Gorman's colleagues carried a bag full of folders.
Gorman also declined to comment.
Bank of America Corp's Brian Moynihan also came to the so-called "bakeoff," arriving just before 11 a.m. EST.
Security was tight, with guards keeping a close eye on all of the building's entrances and trying to block reporters and passers-by from seeing executives as they came and went.
Bankers are expected to come and go throughout the day to make their case for managing a share sale that could exceed $20 billion, between the shares sold by the U.S. Treasury and those offered directly by AIG.
After a recapitalization deal closes on Friday, the Treasury will own 92.1 percent of AIG. The government rescued AIG from the brink of failure in September 2008 in a bailout that topped $182 billion.
Sources told Reuters on Wednesday that bankers were expected to pitch a fee structure of 75 basis points or less -- low for a secondary offering, but still worth perhaps $150 million in fees to the winning banks if the share sale reaches $20 billion.
Sources have said the first share sale is most likely to take place after mid-May, once AIG has filed its quarterly report for the first quarter with securities regulators. There is the possibility, however, that the sale could happen as soon as March if conditions were right.
AIG shares were trading 34 cents higher at $58.74 on Thursday morning on the New York Stock Exchange.
The shares are expected to drop sharply next week, into the mid-$40 range, when recently approved stock warrants begin trading. The warrants, entitling holders to 75 million AIG common shares, were the final key step in the recap deal.
(Reporting by Ben Berkowitz. Editing by Robert MacMillan and Matthew Lewis)
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