As AIG CEO Robert Benmosche undergoes treatment for his illness, we can only wish him a speedy return to better health.
Hopefully he is able to at least enjoy the fruits of his decision process — His move to IPO AIG’s Asian ‘AIA’ business has been a slam dunk. AIA shares are soaring in Hong Kong today, as they seem to have been priced savvily, so that they’d make a bang.
AIA, which priced the IPO at a cheaper valuation than its publicly traded regional rivals, listed its shares after Hong Kong’s Hang Seng Index climbed to a more than two-year high this month. AIG Chief Executive Officer Robert Benmosche sold a 58 per cent stake in a unit that spans 15 Asian markets and was described by one of his predecessors as a “crown jewel” to help repay a $182.3 billion U.S. government bailout.
“AIA was always going to have a great opening given it was priced at a far cheaper valuation to peers, the strong demand for the IPO, and the grey market prices,” said Gavin Parry, managing director of Parry International Trading Ltd. in Hong Kong. “It’s a prime insurance asset given its China origins and pan-Asian reach and network.”
And it’s not like parent AIG’s shareholders have lost out either. Under Benmosche’s watch, AIG has gone from being a stock many thought could easily hit zero, to one which has rebounded over 300% from its crisis lows.
Most importantly, Mr. Benmosche came in during a time when morale at AIG had collapsed and public hatred was intense. Yet he brought a swagger and defiance of political rhetoric at the time when few dared such things, giving the firm its spine back.
So nice job, Mr. Benmosche. Today is your triumph.
Disclaimer: The author owns shares in AIG (AIG). His associates could have exposure to AIG or related securities at any time and without notice. This is not an investment recommendation and data may be subject to error despite best efforts. The author’s opinion could change at any time.
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