CIT Gains After Aircraft Unit Bids Reported to Top $4 Billionby
CIT Group Inc. climbed in New York trading following a news report that initial bids to buy the commercial lender’s aircraft-leasing business topped some analysts’ expectations.
CIT gained as much as 6.2 percent, the most intraday since October, and was up 3.4 percent to $36.16 at 10:31 a.m., the best performer in the Russell 1000 Financial Services Index. The shares have slid 8.7 percent this year.
First-round offers to buy the firm’s airplane-financing unit exceeded $4 billion, the Wall Street Journal reported earlier Wednesday, citing unidentified people familiar with the matter. The unit was expected to sell for $3 billion to $4 billion, according to a May 30 report from Capital IQ. Second-round bids are due next week, the Journal reported.
CIT owned, financed and managed a fleet of more than 350 commercial aircraft serving about 100 customers in 50 countries as of October, as well as providing financing for commercial airlines worldwide. The New York-based firm has been exploring a sale of the aircraft business since 2015 as it seeks to reduce annual operating costs by $125 million over the next two years.
Among investors invited to bid were two Chinese firms, HNA Group Ltd. and Industrial & Commercial Bank of China’s aircraft-leasing unit, and Orix Corp., a Japanese company, people familiar with the matter said in May.