CIT is Looking to Be Acquired by a Large Bank: Reports

CIT is Looking to Be Acquired by a Large Bank: Reports

FOX Business Network (FBN) Senior Correspondent Charlie Gasparino reports that CIT Group Inc. (NYSE:CIT) Chairman and CEO John Thain is “now shopping” the firm and “looking to be acquired by a bigger bank.” Gasparino goes on to report that “Thain is looking to run a bigger firm than CIT” and this move “would put him in the catbird seat.”

CIT is Looking to Be Acquired by a Large Bank: Reports

On CIT CEO John Thain looking to have taihe firm “acquired by a bigger bank”:

SALT New York 2021: Wences Casares And Peter Briger On The Macro Case For Bitcoin

BitcoinAt this year's SALT New York conference, Wences Casares, the chairman of XAPO, and Peter Briger, the principal and co-chief executive officer of Fortress Investment Group discussed the macro case for Bitcoin. Q2 2021 hedge fund letters, conferences and more XAPO describes itself as the first digital bank of its kind, which offers the "convenience" Read More

“Thain has been itching to grow the business. Having a problem growing it. Sources close to the matter are telling the FOX Business Network that Thain is now shopping CIT. Looking to be acquired by a bigger bank…Thain is looking to run a bigger firm than CIT and that would put him in the catbird seat. You know he’s a very experienced CEO…and it would put him in the position to be what he’d want to be. A CEO of a major bank.”

Interestingly, just this morning, Stiflel Nicholas made airwave by stating that Wells Fargo & Company (NYSE:WFC) should buy CIT Group Inc. (NYSE:CIT). Stifel’s main points were  that Wells Fargo & Company (NYSE:WFC) does not need deposits, as it is flush with liquidity. Wells Fargo does not need additional brick and mortar, as the profitability of branches is low in such a low interest rate environment and the company already has a coast-to-coast branching net work. Wells Fargo does need earning assets at attractive yields, given the low loan growth environment and the Fed’s approach to make most every low-risk investment as unattractive as possible.

Because of this, Stifel thinks that CIT Group Inc. (NYSE:CIT) would make a financially attractive acquisition target. It would provide WFC with:

1) $35 billion in higher yielding assets that have already been marked-to-market via Fresh Start Accounting; 2) the ability to substantially improve CIT’s earnings power by replacing its higher cost of funds with WFC’s industry low cost of funds; 3) no material reduction in cash on hand given CIT’s high cash balances; and 4) no meaningfully negative impact to the company’s Tier 1 common capital ratio.

Could Wells Fargo & Company (NYSE:WFC) be the bank CIT Group Inc. (NYSE:CIT) is talking to? We will update this story when we find out more information

(Disclosure: Long WFC)



Updated on

No posts to display