Topic: How To Invest

The Successful Investor Hotline – Friday, May 19, 2017

Article Excerpt

CANADIAN IMPERIAL BANK OF COMMERCE, $106.66, Toronto symbol CM, is Canada’s fifth-largest bank, with total assets of $513.3 billion. Shareholders of Chicago-based PrivateBancorp Inc. (Nasdaq symbol PVTB) have voted to accept CIBC’s latest takeover offer. PrivateBancorp mainly lends to small and mid-sized businesses and 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 $4.9 billion U.S. (45% in cash and 55% in stock). To put that in context, it earned $1.2 billion (Canadian), or $2.89 a share in the quarter ended January 31, 2017. The bank expects to complete the purchase by June 30, 2017. PrivateBancorp should begin to lift the bank’s overall earnings in the third year following the acquisition. The purchase also helps cut the bank’s high exposure to Canada, which supplies 85% of its revenue. Moreover, CIBC plans to cross-sell other services to PrivateBancorp’s high-quality clientele. OUR RECOMMENDATION: CIBC is still a buy. CIBC recent coverage Hotline for…