Posted on 02/26/2009 6:49:33 AM PST by marshmallow
Bids for American International Group's(AIG Quote - Cramer on AIG - Stock Picks) Asian arm are due Friday and a number of prospective bidders, including HSBC Holdings(HBC Quote - Cramer on HBC - Stock Picks) and AXA SA have abandoned the process and no further bids may be forthcoming, the Wall Street Journal reports.
AIG initially intended to sell 49% of American International Assurance, which is Asia's largest life insurer with operations in 10 countries. It has since signaled it would sell the entire unit.
The Journal reports the apparent failure of the auction could explain why AIG has asked the U.S. government to restructure the terms of its bailout. A key aspect of the plan involves allowing AIG to repay some of its obligations to the government, or up to $100 billion -- with stakes in operating businesses, such as those in AIA.
People close to potential bidders say AIG has been slow to market the business, and bidders have griped about AIG's price expectations of $20 billion to $40 billion on the unit.
In addition to HSBC and AXA, others initially interested in AIA included China Life Insurance, Bank of China and Prudential PLC(PUK Quote - Cramer on PUK - Stock Picks).
However, none of the parties is now likely to put forth a bid, the Journal reports. A number of the potential bidders value AIA in the $15 billion range, well below the price AIG had been expecting.
(Excerpt) Read more at thestreet.com ...
Nothing to worry about here. After all, we taxpayers have LOTS of money and Hussein and his cronies are more than willing to spend it. Big Brother will buy yet another company and the American taxpayer will foot the bill. Ah! Marxism at work!
I hate nationalizing banks and insurance companies, but I hate it even more just nationalizing their debts while letting their assets be returned clean and shiny to the original shareholders.
The AIG rescue is unraveling.
If they don't sell now, more money will need to be poured into them.
Pick your poison.
I have a friend who was an executive at AIG. He told me Hank Greenberg insisted on having his own elevator to his office - one no one else was allowed to use.
Someone once hitched a ride to the executive floor on it, and was fired.
Maybe a true story, maybe not - be no doubt a very arrogant organization that is now reaping the consequences of that arrogance.
Interesting. Thanks for posting.
Why would anyone bid more than $20 for some part of AIG? If it was my money, I’d want to have several forensic accountants spend 3 months going over their books, so I’d have some clue as to what I was REALLY buying.
I’ll open the bidding at $1.
I don't know if it's true, but it is not uncommon for CEOs of large companies, especially those that grew up working in the 40s, 50s and 60s. They have a stong hierarchical mentality and a fear of the working class.
The US insurance subsidiaries are really very stable and make consistent income year over year. They don’t grow by leaps and bounds, but look what Wall Street’s thirst for growth has done to the economy. The problem is that no private investor, consortium or company has millions and billions in cash to make purchases right now. Even if they do, they are sitting on it until the market turns around. Also, I suspect buyers are afraid of the risky investments that AIG pushed down to the subs.
So when it comes to a rescue, there's no such thing as a "lost cause"?
And the loss cannot be avoided by being shirked - it just falls on someone else and doubles. It is false economy to try to save money by not paying your bills.
It already is falling on somebody else; the taxpayer.
But we have your reassuring word that everything will be just fine, right? All we have to do is cough up and eventually (who knows when?), AIG will start to float again.
When you already own 30% of everything, you can't cut your losses by shooting your own institutions in the head.
However, investors don't have a particularly optimistic view of the company. Their shares are trading around 50 cents, last I looked. Damn near zero, anyway. You can take that any way you want. Either as a vote of no confidence in the long term viability of the company or as a lack of confidence that the government will shell out more money and/or it will be able to raise cash in the market place.
AIG are due to report 4Q numbers next week, I believe. Various rumors are saying that it will be a $60 billion loss. For one quarter.
Stay tuned.
Are they afraid of their fellow employees?
What would happen if AIG failed? Why don’t we let them fail?
We've invested too much money in them now to let them fail.
Yes! That's why the executive floor is locked!
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