Earlier Tuesday the
rumor mill was abuzz with word that hedge fund manager John Paulson of Paulson & Co. was considering combining New York lender CIT Group Inc. (NYSE:CIT) with IndyMac Federal Bank.
However, Tuesday afternoon
John Carney at Clusterstock reported that the rumors were unfounded, citing an anonymous source. The story was also
debunked by Reuters reporter Joe Giannone, who wrote, "one source familiar with the situation dismissed the talk: 'There is absolutely no relations between IndyMac and CIT. Linking the two companies is just wrong.' "
But the denial has fallen on deaf ears: CIT shares were up 19 cents, or 11%, to $1.86 in midday trading on the New York Stock Exchange.
Tuesday morning, The Deal's Gerald Magpily
said that a merger could make sense -- "For IndyMac, a merger would allow it to diversify into commercial loans, giving it another source of revenue outside of its traditional mortgages...[and the] hookup would boost CIT's deposit base." But for now it appears that such a deal won't be taking place. -
Sara Behunek
