Ex-Merrill CEO Thain Works His Magic Again

Super Thain

John Thain, who sold Merrill Lynch for a premium at the height of the financial crisis, has transformed the once-bankrupt lender CIT Group into an enticing takeover target for some of the largest banks.

Toronto-Dominion Bank and Wells Fargo, both flush with deposits and boasting high credit ratings, could be drawn to the commercial lender as a way to make more money by providing financing to non-Standard & Poor’s 500 Index companies, said Ely & Co.

CIT, which has a market value of $8.7bn, would give a buyer more corporate customers at a time of growth in commercial and industrial lending, according to data compiled by Bloomberg.

While still hobbled by a junk rating and a share price that’s trailed other financial stocks during the last two years, CIT earns more on its loans than 99 percent of U.S. banks and is projected by analysts to post its biggest profit this year since emerging from bankruptcy in 2009, the data show.

When Thain was named chief executive officer of CIT in February 2010, the firm had just emerged from bankruptcy and he was reeling from a high-profile exit from Merrill Lynch. In the crisis that brought down Lehman Brothers Holdings Inc. in September 2008, Thain had succeeded in persuading Bank of America Corp. to pay $29 a share for Merrill Lynch, a 70% premium to its stock price.

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