First Citizens, the Raleigh, North Carolina-based century-old bank holding company, had issued a statement on Friday saying that the American regional lender was looking to purchase its New York City-based peer CIT Group Inc.
at an all-stock $2.2 billion takeover deal. Nonetheless, industry analysts and critics had expressed sheer discontent over the deal citing the timing of the accord, since the merger came forth at a critical period when a majority of United States’ consumer lending entities had been grappling with a near-zero interest rate.
However, followed by the reveal of the report, shares prices of New York-based lender CIT rocketed as much as 26 per cent to $24.86, well above the buyout offer of $21.90 per share, while the shares’ prices of First Citizens gained 10.5 per cent to $390.24 a share.
In point of fact, First Citizen said at its Friday’s statement that the deal, which the Raleigh-based regional lender has been expecting to close by the first half of 2021, would create a financial entity with more than $80 billion in deposits and an approximated $100 billion in assets, while the acquisition deal in effect would make First Citizen the United States’ 19th largest lender.
First Citizens agrees to a $2.2 billion takeover of CIT
Besides, although the deal had been heavily criticized due to a steep downcast among the US lenders due to a near-zero interest rate, offering an incongruent viewpoint, First Citizens was quoted saying at its Friday’s statement that the all-stock merger deal would combine its budget retail deposit franchise with CIT’s national commercial lending operation, which in effect could deliver a greater divergence for First Citizens to drive growth.
S In tandem, according to the financial terms of the deal, CIT shareholder would receive 0.0620 shares of First Citizens for each share they had been holding, while the First Citizens Chair and Chief Executive Frank Holding Jr. would retain his role in the merged entities.