By Greg Hazley
American International Group, which became the poster child of the 2008 financial crisis and took a sustained public and political PR beating that even included its PR operation, has begun making a pitch to investors as it slates a $9B public offering of stock with the U.S. Treasury this month.
Asked if AIG is working with outside PR counsel, Mark Herr, an attorney who is VP of corporate affairs and media at AIG, told O’Dwyer’s via email that the company’s internal communications is managing the pitch.
Time's March 30, 2009 cover |
AIG executives have kicked off a “road show” to promote the 300-million share offering, which started May 11. Currently in Europe and Asia and eying sovereign wealth funds, the execs will woo investors in New York, Boston and other U.S. cities next week, said the Financial Times and Wall Street Journal.
The Treasury owns slightly more than 92% of AIG, or 1.66 billion shares, following its September ’08 bailout.
AIG’s PR efforts were the focus of intense criticism in 2009 as members of Congress and media put its roster of four agencies – Burson-Marsteller, Kekst & Co., Hill & Knowlton and Sard Verbinnen – in the crosshairs. Time magazine wondered if the taxpayer-floated company was “spending too much on public relations” while Rep. Elijah Cummings called the PR spending a “prime example of AIG misusing funds.” AIG said at the time that the enormous media and public interest required the PR support.
Two years later with a new PR team at the helm, AIG goes to investors with an offering scaled back from a more ambitious $20B plan in the works last month. AIG said it intends to use $550M of the net proceeds from the offering to fund part of its litigation settlement obligations and will use the balance for "general corporate purposes."
The share sale is also an attempt to rebuild its shareholder pool after its base was wiped out by the '08 collapse. [The New York Times’ Floyd Norris noted today that AIG shares would need to price close to $400 for shareholders hit by the '08 disaster to break even.]
But the AIG sale has a chance to be profitable for the company and Treasury if it tops $28.73/share, a surprise development that could be a PR boost to AIG, especially in the eyes of taxpayers. Its shares are currently trading around $31.
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