PrivateBancorp Holders Approve $4.9 Billion CIBC Takeover

  • CIBC, PrivateBancorp shares little changed after announcement
  • ‘Makes sense for CIBC to diversify outside Canada’: investor

PrivateBancorp Inc. investors approved a $4.9 billion takeover by Canadian Imperial Bank of Commerce after the Toronto-based lender sweetened its deal twice to win over shareholders.

The majority of PrivateBancorp shareholders endorsed CIBC’s bid, the Chicago-based lender said Friday in a statement following a vote at a special meeting. Some 52.9 million votes -- 83 percent of those cast or 66 percent of votes outstanding -- supported the deal, according to a regulatory filing. CIBC first proposed the acquisition on June 29, and in its latest offer agreed to pay $27.20 in cash and 0.4176 of a CIBC common share for each PrivateBancorp share.

"This strategic combination creates meaningful value for stockholders, and we look forward to completing the transaction in June," said James Guyette, PrivateBancorp chairman.

CIBC shares fell 0.2 percent to C$107.12 in Toronto, while PrivateBancorp rose 0.1 percent to $59.56 in New York.

"I’m sure CIBC management is happy to have won shareholder approval given the difficulty in getting it," said Ian Nakamoto, an equity specialist with Raymond James Ltd. “It certainly makes sense to diversify outside of Canada as they are a relatively large player in Canada."

Revised Offers

CIBC, Canada’s fifth-largest lender by assets, pursued the deal to expand its commercial and private-banking business in the U.S. and leverage its wealth management platform in the country. Chicago-based PrivateBancorp, with about $20.4 billion in assets, serves mostly middle-market companies, business owners and wealthy families.

CIBC initially offered to buy PrivateBancorp in June for about $3.8 billion in cash and stock, but the U.S. firm delayed a Dec. 8 shareholder vote after its share price climbed along with other U.S. financial companies following Donald Trump’s election. The Canadian lender boosted its offer by about 20 percent in March after some investors and proxy advisory firms called the bid inadequate, then increased the cash portion by $3 a share, or 12 percent, on May 4 to try and win approval.

Institutional Shareholder Services Inc. last week urged PrivateBancorp investors to vote against CIBC’s offer, saying the deal’s terms offered no protection should CIBC shares fall on heightened concerns over Canada’s housing market. Advisory firms Glass, Lewis & Co. and Egan-Jones Ratings Co. both supported the deal.

— With assistance by Stephen Wicary

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