CIT Group $CIT Gets The Activist Treatment
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CIT Group (NYSE: CIT) now has the new activist investor fund knocking on its door. Hudson Executive Capital, which is ran by former JPMorgan Chase (NYSE: JPM) CFO, owns 0.5% of the financing company.
The thesis is to get CIT Group to break up, calling for the company to sell parts of its businesses to help starve off the recent underperformance. This includes selling its rail and lending operations. Shares are down 30% over the last year.
This goes against what John Thain has been working on five years to do - build up CIT with acquisitions. But with Thain making for the exit, it looks to be time for a strategy change. The big deal is to get CIT out from under the regulators thumb, where after acquisitions pushed the company above $50 billion in assets - it’s now subject to being a systemically important financial institution.