AIG in $600m Arch share sale

Bermuda-based Arch Capital Group said June 8 that it launched an underwritten public secondary offering of 6,381,410 common shares “by certain selling shareholders affiliated with American International Group.”

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.

The underwriters 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. Arch will not receive any proceeds from the sale.

Arch Capital is a Bermuda-based company with approximately $10.84 billion in capital at March 31, 2017, and writes insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.

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