CIBC to Buy PrivateBanCorp in $3.8 Billion Deal
June 29 2016 - 8:10AM
Dow Jones News
Canadian Imperial Bank of Commerce on Wednesday said it agreed
to buy PrivateBancorp Inc., a Chicago-based middle-market
commercial bank, for about $3.8 billion in cash and stock, as CIBC
looks to expand its reach in North America.
CIBC said it would swap $18.80 in cash plus 0.3657 CIBC shares,
which closed Tuesday at $77.11, for each share of PrivateBancorp,
valuing the deal at $47 a share—a 31% premium over PrivateBancorp's
closing price of $35.93 on Tuesday.
PrivateBancorp stock has fallen 19% over the past month but rose
27% in premarket trading to $45.46. CIBC stock has remained
inactive in premarket trading.
CIBC said the acquisition would allow it to deliver banking
services to clients in the U.S., specifically to those of Atlantic
Trust, a private wealth-management firm that CIBC acquired in its
fiscal 2014.
For PrivateBancorp, the deal brings added financial strength,
the benefits of a bigger bank and the ability to provide banking
services in Canada. As of March 31, PrivateBancorp had $17.7
billion in assets.
Toronto-based CIBC recently sold its 41% minority stake in U.S.
wealth manager American Century Investments to Japanese
financial-services firm Normura Holdings Inc. for about $1 billion.
CIBC acquired its 41% interest in American Century in 2011 for $848
million.
Write to Brittney Laryea at brittney.laryea@wsj.com
(END) Dow Jones Newswires
June 29, 2016 07:55 ET (11:55 GMT)
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