CIT Group Inc, the 101-year-old lending company, has pulled out of financing the Molson family's purchase of the Montreal Canadiens hockey team, a family spokesman announced today.
The deal, worth $575 million, is still set to go ahead as the family "have made arrangements with other financial institutions," said Luc Beauregard on behalf of the Molsons. He declined to comment on who the new lender was but Canadian media reports suggest the most likely candidate is the Bank of Montreal.
CIT is currently attempting to restructure its balance sheets and told investors this month it may still face bankruptcy, although the New York based group has lined up $3 billion in emergency financing.
The Montreal based Molson family agreed to buy an 80% share in the hockey team from American millionaire George Gillett in June. (Click here to read our coverage of the story) The family association with the Canadiens is a long one that first began in 1957 and has seen the family or the family business own shares in the team ever since. Hockey is a family passion as much a brewing as seventh generation and company board member Geoff Molson (pictured) said in an interview on the Molson website. "It [the company] was always the subject at the dinner table. The most heated conversations were about the beer business and the hockey game."
The Molson family brewing company is 220 years old, making it the second oldest company in Canada and North America's oldest brewers. In 2005 the Molson and Coors families merged their businesses to create Molson Coors Brewing Company, which has revenues of $4.8 billion.