PrivateBancorp shareholders OK sale to CIBC – Finance News

on May14

12 May 2017 | 2:01 pm

PrivateBancorp shareholders today approved the sale of the Chicago-based bank to Toronto-based CIBC.

The approval clears the way for closure of the $4.8 billion takeover, probably next month. It also closes the books on a bizarre journey for an acquisition that appeared to be a normal bank deal until the election of Donald Trump.

U.S. bank stocks soared on that news, but the stocks of Canadian banks like CIBC are weighed down by worries of a potential housing correction north of the border.

CIBC shares were down 51 cents, or 0.7 percent, on the news. Given that 55 percent of the purchase price is in the form of CIBC stock, PrivateBancorp is valued at $59.69 per share based on CIBC’s stock price.

PrivateBancorp had to delay a shareholder vote scheduled for December. CIBC sweetened the bid twice and still failed to win a recommendation for the deal from influential proxy advisory firm Institutional Shareholder Services.

Nevertheless, 66 percent of shares eligible to vote supported the deal while 13.5 percent were opposed, according to a Securities and Exchange Commission filing.

In an interview, PrivateBancorp CEO Larry Richman said: “It wasn’t close. It was really a strong signal of support.”

Richman now will become head of U.S. banking operations for the smallest of Canada’s five major banks and sit on its global executive committee. PrivateBancorp will represent CIBC’s U.S. platform and will contribute about 10 percent of the bank’s earnings once the deal closes.

The goal, Richman said, is for the U.S. to account for 20 to 25 percent of CIBC’s profits over time.

“We’re meaningful to begin with, and we’ll be more meaningful over time,” he said.

Along with Richman, virtually all of PrivateBank’s workforce will stay on.

Asked how the bank will be branded after the deal closes, Richman said news on that would be disclosed later.

As for how he would celebrate the near-completion of a deal representing the crowning achievement of his 40-year-plus banking career, Richman said he would spend the whole weekend with his tight-knit family, whom he hasn’t seen much of recently. “And rest.”



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