The fate of the takeover bid is still up in the air
While Chicago-based PrivateBancorp reported estimate-beating earnings for Q4 2016, it has not updated investors on its plans to reschedule a critical shareholder vote.
A meeting of PrivateBancorp shareholders to approve a proposed US$3.8-billion sale to CIBC was originally planned on Dec. 8, but was postponed after three proxy advisor firms recommended against the proposal, according to the Globe and Mail.
CIBC announced the takeover bid in June as part of its US growth strategy. PrivateBancorp said in December that it expected to move the meeting to early in the first quarter of 2017. PrivateBancorp CEO Larry Richman has said that the meeting date is to be established by the firm’s board of directors, though no timetable for the process was given.
The proposed deal is subject to approval by US and Canadian banking regulators, as well as PrivateBancorp shareholders. CIBC had expected to seal the deal by the first quarter of 2017. If it is not completed by June 29, either party can terminate it, according to regulatory filings.
“We are continuing to work closely with PrivateBancorp to obtaining our required regulatory approvals and remain fully committed to the transaction,” said CIBC representative Caroline Van Hasselt via email.
PrivateBancorp’s shares have skyrocketed in value since US President Donald Trump’s election, effectively engulfing the premium priced into CIBC’s original $47-per-share offer. It was on this basis that three proxy firms advised PrivateBancorp to turn down the deal. As the deal remains in limbo, several analysts have suggested that CIBC could afford to raise its offer price to as much as $55 per share to get the US bank back to the table.
CIBC CEO Victor Dodig said to Bloomberg News last month that he would not change his bank’s cash-and-share bid, adding that he was willing to wait out the market rally if necessary. Since then, the US lender’s shares have shown little indication of losing momentum.
Richman has recently reaffirmed his commitment to the deal. “The long-term strategic benefits of the transaction remain compelling,” he said in the statement reporting his firm’s fourth-quarter earnings.
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A meeting of PrivateBancorp shareholders to approve a proposed US$3.8-billion sale to CIBC was originally planned on Dec. 8, but was postponed after three proxy advisor firms recommended against the proposal, according to the Globe and Mail.
CIBC announced the takeover bid in June as part of its US growth strategy. PrivateBancorp said in December that it expected to move the meeting to early in the first quarter of 2017. PrivateBancorp CEO Larry Richman has said that the meeting date is to be established by the firm’s board of directors, though no timetable for the process was given.
The proposed deal is subject to approval by US and Canadian banking regulators, as well as PrivateBancorp shareholders. CIBC had expected to seal the deal by the first quarter of 2017. If it is not completed by June 29, either party can terminate it, according to regulatory filings.
“We are continuing to work closely with PrivateBancorp to obtaining our required regulatory approvals and remain fully committed to the transaction,” said CIBC representative Caroline Van Hasselt via email.
PrivateBancorp’s shares have skyrocketed in value since US President Donald Trump’s election, effectively engulfing the premium priced into CIBC’s original $47-per-share offer. It was on this basis that three proxy firms advised PrivateBancorp to turn down the deal. As the deal remains in limbo, several analysts have suggested that CIBC could afford to raise its offer price to as much as $55 per share to get the US bank back to the table.
CIBC CEO Victor Dodig said to Bloomberg News last month that he would not change his bank’s cash-and-share bid, adding that he was willing to wait out the market rally if necessary. Since then, the US lender’s shares have shown little indication of losing momentum.
Richman has recently reaffirmed his commitment to the deal. “The long-term strategic benefits of the transaction remain compelling,” he said in the statement reporting his firm’s fourth-quarter earnings.
Related stories:
CIBC CEO foresees investor approval of major takeover bid
Trump love affair may turn sour on anti-trade policy
