Banks will meet in New York City on Thursday to make their case for the right to sell the U.S. Treasury's stake in American International Group, three people familiar with the matter said on Wednesday.

The Treasury will own 92.1 percent of the bailed-out insurer after a recapitalization deal closes, which is expected this week.

Sources have said a large secondary offering - $10 billion or more - is expected sometime in the second half of May.

The company and the government are expected to treat the sale much like an initial public offering, given its size and its significance as the effective return of AIG to widely held public ownership.

Two of the people familiar with the meeting said the banks are likely to come in pitching for a fee of 75 basis points or less, in line with the fees on the IPO of General Motors.

Such a structure would be much less than usual for either an IPO or a secondary share offering of that size.

The location of the meeting is not clear, though it is expected to draw the top executives from the participating banks. A source familiar with the situation said Bank of America Chief Executive Brian Moynihan would be among those attending.

AIG shares, currently trading above $58, are expected to fall back to the mid-$40 range next week when stock warrants are likely to begin trading, a source said on Monday.

Even at that range, though, the government would be looking at a paper profit in the neighborhood of $27 billion.

(Reporting by Clare Baldwin and Ben Berkowitz in New York and Joe Rauch in Charlotte, writing by Ben Berkowitz; editing by Carol Bishopric)