Deal with UBS protects Greenberg against share price falls

Former AIG boss Maurice "Hank" Greenberg has agreed to a staged sale of his AIG shares to a unit Swiss bank UBS for $278m, Dow Jones reports.

In a filing Friday with the US Securities and Exchange Commission, Greenberg's investment vehicle Starr International said it would sell up to 10 million AIG shares to UBS Securities. The deal is split into four parts of 2.5 million shares each.

The structure, known as a variable pre-paid forward sale, is designed to help Greenberg limit his exposure to volatility in AIG's share price.

Starr International has no risk if the shares fall below about $31.22, but has will only benefit up to about $46.83 per share. UBS will pocket gains if the shares trade above about $46.83.

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