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AIG directors discuss mortgage-insurance business spinoff, sale: Report

AIG directors discuss mortgage-insurance business spinoff, sale: Report

(Reuters) — American International Group Inc. directors are discussing a spinoff or sale of the company's small mortgage-insurance business as it faces new pressure from shareholders to break itself apart, the Wall Street Journal reported, citing people familiar with the matter.

Billionaire investor Carl Icahn published a letter on Wednesday advising CEO Peter Hancock to spin off AIG's life and mortgage insurance units into public companies. The move would return more cash to shareholders, Mr. Icahn said, and help AIG rid itself of a regulatory burden.

Mr. Icahn said his letter was supported by hedge fund manager John Paulson, who owns 1.1% of AIG.

The discussions have been underway for a while, and no final decision has been made about the unit, the Journal said.

AIG declined to comment on the report.

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