Piper says potential acquisition of AIG by Chubb is ‘possible’

Piper Sandler keeps an Overweight rating on AIG (AIG) following press reports that Chubb (CB) informally approached the company to take it over. Piper sees the merger as “possible,” but recommends investors “take care when adding take-out speculation to their investment thesis.” The firm tells investors to buy insurance names where the stock price is “fundamentally attractive and allow any takeout speculation to be a bonus reason to own the stock.” Culturally, the potential Chubb, AIG merger is a “close fit” given both companies’ relationship with the Greenberg family, the analyst tells investors in a research note. Piper adds that AIG would make Chubb one of the largest, if not the largest, insurer for large commercial firms and specialty lines. Anti-trust concerns are unlikely, it says. Piper sees a potential takeover valuation as “probably significantly above AIG’s current price.: