AIG strikes deal with Icahn, avoids proxy fight

Thu Feb 11, 2016 6:29pm EST
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By Sudarshan Varadhan

(Reuters) - American International Group Inc (AIG.N: Quote) capitulated in its boardroom fight with activist investor Carl Icahn, nominating both his representative and billionaire John Paulson to its board, as it unveiled a bigger-than-expected quarterly loss.

Shares of the company, which boosted its share buyback program and dividend, rose marginally in after-hours trading.

The agreement with Icahn comes just two days ahead of AIG's deadline for shareholders to submit board candidates.

Icahn has been threatening a proxy fight at AIG, the biggest U.S. commercial insurer as he pushes to break it up into three smaller companies.

"We continue to believe that smaller and simpler is better," the investor said in a statement on Thursday.

Sandler O'Neill & Partners LP analyst Paul Newsome said the deal does not signal the end of the tussle between AIG's management and Icahn.

"If anything, it will continue behind the scenes rather than in public," he said.

AIG said it agreed to nominate Paulson, a billionaire investor and president of Paulson & Co, and Samuel Merksamer, a managing director at Icahn Capital LP, to its board.   Continued...

The AIG logo is seen at its building in New York's financial district March 19, 2015. REUTERS/Brendan McDermid