Activist investor Carl Icahn continues to put pressure on insurance giant American International Group (NYSE:AIG) to follow his suggestion in an open letter last month to separate the insurance giant into three public companies, saying it's "too big to succeed."
After Chief Executive Officer Peter Hancock turn down his plan about splitting the company into three, Icahn said he intends to begin a consent solicitation to give shareholders at American International Group Inc. the chance to express their opinion about the company to the board, a move he hopes will force AIG to consider his split plan. A key part of his plan is that if AIG were split up, each of the three small companies would be small enough to avert the “systemically important financial institution” designation, which carries heightened scrutiny and requirements to hold robust capital buffers against losses.
According to a statement released on his website Monday, Mr. Icahn said it has become “abundantly clear” in talks with AIG Chief Executive Peter Hancock that he isn’t willing to “sincerely consider” the breakup idea.
According to Wall Street Journal,Mr. Icahn said his consent solicitation may include a proposal to add a new director who would agree in advance to succeed Mr. Hancock as CEO if asked by the board to do so.
Mr. Icahn owns over 42 million shares of AIG which make him one of the company's largest shareholders. AIG is one of the largest insurance companies in the country.
AIG said in a statement this Monday referring Mr. Icahn’s separation proposal doesn’t make financial sense and it will provide an update on its bid to narrow its focus and improve its financials before reporting fourth-quarter results.
The price of AIG went up almost 1% to $62.8 per share this morning.