Hedge fund manager Carl Icahn reiterated his call for American International Group (NYSE: AIG) to divide up its business lines on the heels of MetLife’s (NYSE: MET) announcement last week that it would spin off its own retail segment.
In 2013, Relational Investors LLC and the pension giant California State Teachers’ Retirement System, or Calstrs, successfully led a shareholder vote to urge the breakup of steel company Timken Co. This result led some activists and corporate advisers to expect to see a wave of such nonbinding proposals. Mr. Icahn initially proposed a motion to break up eBay Inc. in 2013, but dropped the matter. In 2014, eBay and PayPal Holdings Inc. separated and Mr. Icahn maintains a stake and board representation in PayPal.
Icahn said in a letter posted on his website that “it is abundantly clear to me there is only one sensible path for AIG to follow: become a smaller, simpler company with a path to de-SIFI,” referring to new federal regulations that categorize it as a systemically important financial institution (SIFI). He said that he expects management to release an update next Monday that “fails to present a drastic strategic shift and instead is limited to only incremental changes such as small-scale asset sales and incremental cost cutting.”
AIG’s shares rose 0.9% in early trading on Monday and are up 11% over the past 12 months.
In the last November, Carl firstly declared his proposal of breaking up the giant by calling it "too big to succeed" when Carl’s firm has more than 42 million shares of AIG, giving him a 3.4 percent stake. Shares of AIG were up around 3 percent at that time.