U.S. small-business lender CIT Group Inc said it would purchase California bank OneWest Bank NA for $3.4 billion in cash and stock, a deal that will give CIT a more reliable source of funding.Shareholders of IMB Holdco LLC, OneWest's parent company that CIT is acquiring, will get $2 billion in cash and the rest through the issuance of 31.3 million CIT shares, assuming a stock price of $44.33, CIT said in a statement."The selling shareholders very much wanted to get stock. They view the stock as undervalued and that there is lot of appreciation in it," Chief Executive John Thain said in an interview.The lender also said it would buy back up to $500 million in common stock, sending its shares up as much as 14 percent in early trading.
CIT Group Inc. is a bank holding company (BHC) together with its owned subsidiaries (CIT), provides primarily commercial financing and leasing products and other services to small and middle market businesses across a range of industries. Shares of CIT traded higher by 11.51% or $5.06/share to $49.01. In the past year, the shares have traded as low as $41.06 and as high as $52.72. On average, 1786470 shares of CIT exchange hands on a given day and today's volume is recorded at 5056746.
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