Canadian Imperial Bank raises bid for PrivateBancorp to $4.9 bn

Canadian Imperial Bank of Commerce yesterday raised its takeover offer for PrivateBancorp Inc from $3.8 billion to about $4.9 billion, after shareholders opposed the initial bid.

The 20-per cent hike came ahead of a 29 June deadline for the deal to be approved by shareholders of Chicago-based PrivateBancorp.

Under the revised offer, PrivateBancorp stockholders will receive $24.20 in cash and 0.4176 of CIBC common share for each share of PrivateBancorp held for a total of C$2.6-billion in cash and 33.5 million in shares, representing a mix of 40-per-cent cash and 60-per-cent stock.

Based upon yesterday's $87.92 closing price of CIBC, the offer values PrivateBancorp at approximately $4.9 billion (C$6.6 billion or $60.92 per share), representing a 20 per cent increase from its initial offer announced on 29 June 2016.

James Guyette, chairman of PrivateBancorp, said, "We are pleased to announce the revised terms of our proposed transaction with CIBC, which provides our stockholders with a significant increase in value as compared to the initial terms of the transaction.''

''Our Board believes in the long-term strategic value of the combination and, after careful consideration, unanimously supports the amended terms and continues to recommend that PrivateBancorp stockholders approve the transaction," he added.

"We are pleased to have reached an amended agreement with PrivateBancorp," said Victor G. Dodig, CIBC president and CEO. "The quality of its management team and its focus on building a client-first culture make PrivateBancorp an excellent fit with CIBC."

PrivateBancorp provides customized business and personal financial services to middle-market companies, as well as business owners, executives, entrepreneurs.

As of 31 December 2016, the lender had 36 offices in 13 states, $20.1 billion in assets, $15.1 billion in loans, $16.1 billion in deposits and $9.7 billion in assets under management.

CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients.

Through its three major business units - retail and business banking, wealth management and capital markets - CIBC offers a full range of products and services through its electronic banking network, branches and offices across Canada with offices in the US and around the world.

PrivateBancorp's shareholders are expected to vote on the transaction in mid-May. The deal expires on 29 June. CIBC will hold its annual meeting on 6 April.