T-minus two weeks and counting -- it looks to Wall Street like the AIG (NYSE: AIG) IPO is going to happen after all.

Now, if you read my column on the mechanics of this "re-IPO" back in January, you might have thought this was obvious. After all, everyone wanted this deal to happen. AIG wanted to follow in the footsteps of General Motors (NYSE: GM) and Citigroup (NYSE: C) -- and get rid of government oversight. Taxpayers wanted their money back. And of course, the bankers wanted their piece of the action. Problem was, the closer we got to IPO day, the faster AIG's stock seemed to sink ...

As recently as January, AIG shares were selling for $60 or more apiece. Today, shareholders are lucky to get just half that. And therein lies the problem. According to The Wall Street Journal, Treasury needs to liquidate its AIG stake at an average share price of $28.70 in order to break even on its 2008 "investment" in the company. If AIG stock continued to fall, Treasury mused, and it was unable to at least break even, it was planning to shelve the IPO and wait for more "irrationally exuberant" days to exit its stake.

Now, it seems the IPO is a go again.

Maybe not "A-OK," but good enough
AIG shares sell today for a piddling 0.65 time book value, a steep discount to the share prices at insurers Prudential (NYSE: PRU) and MetLife (NYSE: MET), both of which cost close to book value. They fetch a P/B considerably less than that of Berkshire Hathaway (NYSE: BRK-B), and less than half the valuation at Aflac (NYSE: AFL).

But while AIG seems cheap relative to its peers, at $30 and change, the shares seem to have bounced off a floor somewhere around $30. At this price, Treasury has a chance to proceed with its plan to sell 200 million shares later this month, and at least not immediately torpedo its chance of breaking even on the entire AIG stake. (As happened with GM.) Heck, taxpayers might even make a profit. (As happened with Citigroup.)

Come to think of it, at 0.65 time book ... maybe investors will get a chance to profit from the AIG IPO, too.

How will the AIG IPO play out? Add the stock to your watchlist and follow along.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.