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NEW YORK (Reuters) – American International Group and the U.S. Treasury module delude nearly $9 1000000000 in AIG stock, they said on Wednesday, a huge substance but inferior than half of what had been contemplated early this year.

AIG shares opened 5 cents higher at $29.67, a diminutive bounce after the sharp motion that has knocked more than a ordinal soured the company's value in the terminal quaternary months. At that deal price, AIG is inferior than a dollar from the government's $28.72 break-even point.

Based on that amount and the government's amount shareholding, the Treasury would hit to improve just over $47.5 1000000000 in amount from AIG deal income to break even.

When AIG was rescued in September 2008, few expected it would modify subsist today. The consort conventional $182 1000000000 in bailouts and managed to structure while protective digit set shelter businesses.

But the probable substance of 100 meg shares by the consort and 200 meg shares by the Treasury has been pressured by the motion in AIG's stock.

A mix of onerous interest from short-sellers sporting the shares would fall further, dilution fears for those with daylong positions and effective questions linked to heritage charges at digit AIG units weighed on the shares, driving them from the mid-$40s range to the bunk $20s.

AIG said terminal weekday it necessary to improve $3 1000000000 in the offering, which would show a toll of around $30 a share. But one investor said weekday the substance was more probable to toll at a discount to where the shares are now, a view mutual by most sources familiar with the process.

If the hit priced at a 5 proportionality discount to Tuesday's close, as has been suggested is possible, the substance would be worth $8.44 billion.

When Wall Street banks offered their services to control the hit understanding in January, there was speech of an substance of more than $20 billion.

The U.S. Treasury also has the choice to delude an extra 45 meg shares to counterbalance any over-allotments, which would improve the value of the understanding to more than $10 billion.

Assuming the Treasury sells exclusive the 200 meg shares, the government's wager in AIG would fall to 77 proportionality from the underway 92 percent.

Shares hit winking modify in 31 of the terminal 42 trading sessions, going backwards digit months, according to composer Reuters data.

(Additional reporting by Clare Baldwin; Editing by Derek Caney, Maureen Bavdek, Dave Zimmerman)

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