NEW YORK (Reuters) - The U.S. Treasury and the banks working on the sale of the government's stake in bailed-out insurer American International Group <AIG.N> are at odds over how low to price the first sale of stock, CNBC reported on Thursday.
The network, citing sources, said the Treasury wanted a price around $31.50 per share, while underwriters were pushing to go as low as $25 per share, arguing the lower price would encourage a larger overall sale.
The government breaks even on its AIG investment at $28.72 per share, meaning the debate comes down to whether or not the Treasury is willing to lose money on its 92 percent holding in the company.
Neither a Treasury spokesman nor an AIG spokesman was immediately available to comment.
AIG is due to report earnings Thursday afternoon. The company and the government had been expected to launch the share sale this month, an offering that at one time had been expected to exceed $15 billion.
AIG shares fell 2.2 percent to $30.94 in early afternoon trading. Since a warrant issue in late January that was part of the company's recapitalization, the stock has lost more than 30 percent of its value.
(Reporting by Ben Berkowitz, editing by Gerald E. McCormick)