Banking & Finance

CIBC Moves to Acquire PrivateBancorp

PrivateBancorp, Inc. (NASDAQ: PVTB) is making a solid gain on Wednesday following its most recent deal to be acquired. The company has entered into a definitive agreement to be acquired by Canadian Imperial Bank of Commerce (NYSE: CM) in a cash and stock transaction.

Ultimately, CIBC will pay $18.80 in cash and 0.3657 of a CIBC common share for each share of PrivateBancorp common stock. Based on the June 28 closing price of CIBC’s common shares on the NYSE ($77.11), the total transaction value is roughly $3.8 billion or $47.00 per share of PrivateBancorp common stock at the announcement.

The transaction is expected to close in the first calendar quarter of 2017, but is still subject to approval by PrivateBancorp’s shareholders and by regulators.

Victor G. Dodig, President and CEO of CIBC, commented:

Acquiring PrivateBancorp accelerates our strategy of building a strong, innovative and client-focused bank by creating opportunities to bank across borders for our Canadian clients, and offering more services to our private wealth clients at Atlantic Trust.

Larry Richman, President and CEO of PrivateBancorp, added:

Our team has built a premier commercial and private banking business. We believe this transaction allows us to not only continue our success but to achieve even more as our clients benefit from CIBC’s financial strength, and our employees become part of a respected North American organization that shares our values and is strategically positioned for long-term growth. We look forward to extending U.S. banking services to CIBC’s Canadian clients and Atlantic Trust’s private wealth clients, in addition to exploring mutual growth opportunities going forward.

Shares of PrivateBancorp were recently trading up 22% at $43.97. The stock has a consensus analyst price target of $43.42 and a 52-week trading range of $31.18 to $45.79.

Shares of CIBC were last trading down 3.6% at $74.35, with a consensus analyst price target of $74.18 and a 52-week trading range of $56.29 to $82.60.