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PrivateBancorp (PVTB) Receives Revised Bid Offer from CIBC
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PrivateBancorp, Inc. received a revised offer price by Canadian Imperial Bank of Commerce (CM - Free Report) as the latter will take over the former, as announced in Jun 2016. The new deal price has been increased by 20% to $4.9 billion.
Both the companies entered into a revised merger agreement, under which Canadian Imperial would pay $24.20 in cash and 0.4176 of its share for each PrivateBancorp share. The value of CIBC common shares at closing will be the decisive factor for payment consideration to PrivateBancorp common stockholders. The cash-stock deal includes cash payment of about $1.9 billion (C$2.6 billion) and about 33.5 million CIBC common shares, representing 40–60% cash-stock mix.
What Led to the Revised Offer?
Chicago-based PrivateBancorp reworked upon its strategy, as various promises made by President Donald Trump, regarding fewer taxes, higher interest rates and reduced regulatory pressures, are likely to significantly benefit the U.S. finance companies. Moreover, the improving market scenario has led shares of most companies to rise since the Nov 2016 elections.
So, the original deal price of $47 seems to be unfavorable. Following such trend, many shareholders of PrivateBancorp contemplated whether the deal would be profitable or not, which delayed shareholders’ meeting. Now, the stockholders of record as of Mar 31, 2017, are entitled to vote at the Special Meeting anticipated in mid-May.
Presently, the deal is expected to close in second-quarter 2017, subject to certain approvals, including PrivateBancorp's stockholders and the federal banking regulators in Canada, and the U.S.
James Guyette, Chairman of the Board 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. The amended terms agreed between CIBC and PrivateBancorp reflect changes to trading market conditions and the interest rate environment since we announced the transaction in June 2016 as well as PrivateBancorp's continued strong performance. 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."
Larry Richman – President and CEO of PrivateBancorp – added, "The PrivateBancorp team remains enthusiastic about joining the CIBC family. This transaction will enable us to accelerate our track record of success through partnering with CIBC, and we look forward to closing the transaction as expeditiously as possible."
Share Price Movement
Currently, PrivateBancorp carries a Zacks Rank #2 (Buy).
Shares of PrivateBancorp gained 29.1% over the last six months, outperforming 25.4% growth recorded by the Zacks categorized Midwest Banks industry.
Associated Banc-Corp witnessed an upward earnings estimate revision for the current year, over the last 90 days. Moreover, its shares have gained approximately 27% in the last six months.
Enterprise Financial’s current-year earnings estimates have been revised upward over the last 90 days and its share price has gained 37.9% in the last six months.
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PrivateBancorp (PVTB) Receives Revised Bid Offer from CIBC
PrivateBancorp, Inc. received a revised offer price by Canadian Imperial Bank of Commerce (CM - Free Report) as the latter will take over the former, as announced in Jun 2016. The new deal price has been increased by 20% to $4.9 billion.
Both the companies entered into a revised merger agreement, under which Canadian Imperial would pay $24.20 in cash and 0.4176 of its share for each PrivateBancorp share. The value of CIBC common shares at closing will be the decisive factor for payment consideration to PrivateBancorp common stockholders. The cash-stock deal includes cash payment of about $1.9 billion (C$2.6 billion) and about 33.5 million CIBC common shares, representing 40–60% cash-stock mix.
What Led to the Revised Offer?
Chicago-based PrivateBancorp reworked upon its strategy, as various promises made by President Donald Trump, regarding fewer taxes, higher interest rates and reduced regulatory pressures, are likely to significantly benefit the U.S. finance companies. Moreover, the improving market scenario has led shares of most companies to rise since the Nov 2016 elections.
So, the original deal price of $47 seems to be unfavorable. Following such trend, many shareholders of PrivateBancorp contemplated whether the deal would be profitable or not, which delayed shareholders’ meeting. Now, the stockholders of record as of Mar 31, 2017, are entitled to vote at the Special Meeting anticipated in mid-May.
Presently, the deal is expected to close in second-quarter 2017, subject to certain approvals, including PrivateBancorp's stockholders and the federal banking regulators in Canada, and the U.S.
James Guyette, Chairman of the Board 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. The amended terms agreed between CIBC and PrivateBancorp reflect changes to trading market conditions and the interest rate environment since we announced the transaction in June 2016 as well as PrivateBancorp's continued strong performance. 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."
Larry Richman – President and CEO of PrivateBancorp – added, "The PrivateBancorp team remains enthusiastic about joining the CIBC family. This transaction will enable us to accelerate our track record of success through partnering with CIBC, and we look forward to closing the transaction as expeditiously as possible."
Share Price Movement
Currently, PrivateBancorp carries a Zacks Rank #2 (Buy).
Shares of PrivateBancorp gained 29.1% over the last six months, outperforming 25.4% growth recorded by the Zacks categorized Midwest Banks industry.
Other Stocks to Consider
A couple of similarly-ranked stocks in the same space are Associated Banc-Corp (ASB - Free Report) and Enterprise Financial Services Corp (EFSC - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Associated Banc-Corp witnessed an upward earnings estimate revision for the current year, over the last 90 days. Moreover, its shares have gained approximately 27% in the last six months.
Enterprise Financial’s current-year earnings estimates have been revised upward over the last 90 days and its share price has gained 37.9% in the last six months.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>