Canadian Imperial Bank of Commerce has raised its offer to acquire PrivateBancorp in Chicago after a surge in U.S. bank stocks had made its original offer less attractive.

CIBC said Thursday that it had increased its offer by 20% to $4.9 billion. The boards of the Toronto company and the $20 billion-asset PrivateBancorp unanimously approved the revised offer, the companies said in a joint news release.

CIBC bank branch
Canadian banking giant CIBC expects to complete its acquisition of Chicago-based PrivateBancorp in the second quarter. Bloomberg News

Under the revised terms, PrivateBancorp shareholders would receive $24.20 in cash and 0.4176 of CIBC stock for each share owned. PrivateBancorp shareholders are set to vote on the agreement on Friday and if they approve, the deal is expected to close in the second quarter.

In June the $386 billion-asset CIBC had offered to pay $3.8 billion for PrivateBancorp, but the price amounted to a discount to PrivateBancorp’s shares when U.S. bank stocks soared after Donald Trump was elected president in November. PrivateBancorp had postponed a December shareholder meeting to vote on the deal after investors and a proxy-advisory group had recommended rejecting the deal.

"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," PrivateBancorp Chairman James Guyette said in the release. “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.”

Shares of PrivateBancorp climbed nearly 6% Thursday morning, to $59.42. The stock is up roughly 30% since Nov. 8.

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