AIG to raise some $600m by selling Arch shares

Arch Capital Group has initiated an underwritten public secondary offering, which will result in certain shareholders affiliated with American International Group selling their shares in the company.

The Bermuda re/insurer is looking to sell some 6.4 million common shares, which should raise some $600 million.

The underwriters also have been granted a 30-day option to purchase up to an additional 957,210 common shares from the selling shareholder at the public offering price, less underwriting discounts and commissions.

Proceeds from the sale of common shares pursuant to the public offering will be received by the selling shareholder. The company will not receive any proceeds from the sale of common shares pursuant to the public offering.

The offering is being led by Barclays Capital and Wells Fargo Securities as joint book-running managers.

AIG sold its 100 percent interest in United Guaranty to Arch in August 2016 in a deal partially paid in Arch stock.

The total price of $3.4 billion consisted of $2.2 billion of cash, $250 million of newly issued Arch perpetual preferred stock, and $975 million of newly issued Arch convertible non-voting common-equivalent preferred stock.

At current prices, the Arch shares now being sold are worth around $604 million.