It's no mystery that newly appointed CEO Edward Liddy i
s digging through American International Group Inc.'s books to announce next week what assets the company will sell off to foot the bill of the Federal Reserve's $85 billion
80% stake in the company.
Senior analyst Donald Light of research and consulting firm Celent offered Dealscape some perspective on the task.
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"Right now there is a lot of uncertainty as to what
assets are going to
get sold in what order. Some parts of AIG, they are going to probably
keep like the life and annuity parts, and other parts of AIG will get
sold," Light said.
Since the sell-off could be at fire-sale prices, strategics may have to compete with private equity firms.
"If and when AIG sells some of its subsidiaries, then the buyers
are going
to be insurance companies and private equity firms, and they will get
the assets at a good price," Light said.
Light added that the assets on the sell list likely include the aircraft leasing business International Lease
Finance Corp. and the derivatives business. Bidders for ILF have been widely speculated about in the media. And, even though AIG blamed the derivatives business for write-downs of more than $11
billion
in the last quarter, it will most likely sell quickly to a private equity firm, notes Light.
"The derivatives
business is what brought the ship down, but it's the right price. So I
would guess private equity would be interested in these or non-U.S.
investors," Light said. - Maria Woehr
