Topic: How To Invest

The Successful Investor Hotline – Friday, December 9, 2016

Article Excerpt

CANADIAN IMPERIAL BANK OF COMMERCE, $112.00, Toronto symbol CM, agreed to buy Chicago-based PrivateBancorp Inc. (Nasdaq symbol PVTB) in June 2016. PrivateBancorp mainly lends to small and mid-sized businesses. It also provides wealth management services. In addition to Chicago, it operates in 11 other U.S. markets. Under the terms of the deal, CIBC will pay $3.8 billion U.S. (40% in cash and 60% in stock). To put that in context, the bank’s market cap (the total value of all outstanding shares) is $44.8 billion (Canadian). The purchase helps reduce CIBC’s exposure to Canada, which accounts for over 80% of its earnings. The bank can also cross-sell other services to PrivateBancorp’s high-quality clientele. PrivateBancorp’s shareholders were to vote on the deal this week. However, that company’s stock price has jumped nearly 60% since the deal was announced and its shares are now trading slightly above CIBC’s offer. In response, PrivateBancorp has postponed the vote until the first quarter of 2017. CIBC said it has no plans…