Carl Icahn Recommends AIG Spin Off In Letter

Billionaire activist investor Carl Icahn recently expressed his thoughts about the scalability of insurance giant American International Group (AIG). In a letter addressed to AIG Chief Executive Peter Hancock, Icahn said that AIG should be spinned off to two major business units, life and mortgage insurance, in order to enhance shareholder value. The letter was published on Icahn’s website. 

“Despite definitive action on the part of Congress and regulators to encourage this company to become smaller and simpler by splitting up, you have shown no sign of urgency and have chosen a “wait and see…for years” strategy void of decisive leadership. As a result AIG consistently trades at a substantial discount to book value. It is a “no-brainer” that the simple act of splitting this company up will greatly enhance shareholder value,” Icahn wrote. 

Icahn, who reportedly has a “large” share in AIG, criticized the company for not being able to catch up to its competitors in terms of return of equity, Forbes.com said.

Hancock has since respond to the letter, and said, “AIG maintains an open dialogue with all our shareholders and welcomes their feedback and ideas. We have taken important and significant steps to reposition AIG by both simplifying and de-risking the company, and realizing attractive valuations from non-core asset sales. We remain on course and are determined to continue and accelerate these efforts. We look forward to sharing our progress and strategies at our regularly scheduled earnings call on Tuesday.”