American International Group Inc.'s stock ran up 1.7% in premarket trade Tuesday, after activist investor Carl Icahn issued an open letter to the insurer's board, again pushing for a break-up of the company. Icahn wrote that in the wake of a recent shareholder poll, the breakup announcement by MetLife Inc. and conversations with shareholders, that to meet minimum expectations of shareholders, the company has to become a pure play property and casualty insurer by selling, spinning off or separating non-core operations. That would allow the company to apply to no longer be labeled by the government as a "systemically important financial institution" (SIFI), which is accompanied with burdensome regulatory requirements. MetLife announced plans last week to spinoff its U.S. retail business to de-SIFI. "I suspect, after two months of waiting, management will release a 'strategic update' on January 26th 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," Icahn's letter states. "If this occurs then the little credibility management now has will be lost." AIG's stock has lost 6.5% over the past three months through Friday, while the S&P 500 has dropped 7.5%.
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