Yesterday, American International Group, Inc. (AIG) announced its intentions to sell a portion of its 59% stake in Transatlantic Holdings Inc. (TRH), a reinsurer that is publicly traded on the New York Stock Exchange, in an underwritten secondary offering intended to raise capital for AIG. AIG plans to sell 26 million TRH shares, of the approximately 39.1 million shares it owns, as well as providing the underwriters with an over-allotment option to sell an additional 3.9 million shares. Following the offering, AIG’s stake in TRH will drop to 19.7%, or 13.9% if the over-allotment option is fully exercised. The preliminary prospectus filed by TRH yesterday with the Securities and Exchange Commission with respect to the secondary offering clarifies that TRH will not be selling any stock in or receive any proceeds from the offering. TRH also announced that, in connection with the proposed offering, it would be entering into a master separation agreement, transition services agreement, registration rights agreement and stockholders agreement with AIG.