Canadian Imperial Bank of Commerce stands by its cash-and-stock bid to buy U.S. lender PrivateBancorp and is willing to wait out a market rally to complete the deal, Chief Executive Officer Victor Dodig said.
"We worked long and hard at getting the right consideration in place in terms of cash and stock," Dodig said in a Bloomberg TV Canada interview taped Dec. 12 for future broadcast. "As the market upsurges, we had the ability to wait," Dodig said, adding the Toronto-based bank will sit tight "for it to get to a better place."
PrivateBancorp postponed a Dec. 8 shareholder vote on CIBC's takeover after proxy-advisory firms and some investors called the offer insufficient following a post-election rally of U.S. regional lenders. CIBC agreed June 29 to buy the Chicago-based lender in a deal valued at the time at $3.8 billion, but a surge in PrivateBancorp's shares to a high last week of $54.70 put the Canadian bank's offer at a discount.
Dodig said last week's postponed shareholders vote "says nothing" about CIBC's thinking on the deal's cost or what the lender is willing to pay. CIBC offered $18.80 in cash and 0.3657 of a CIBC common share for each PrivateBancorp share, which currently puts the offer at about $49.92 a share. PrivateBancorp traded Monday at $53.26.
"What we've put forward in terms our own joint assessment of value — this is a friendly merger — was cash and stock," Dodig, 51, said. "We like that formula, we like the way it looks, and we think it'll work."
CIBC is pursing the deal to expand its commercial and private banking business in the U.S. and leverage its existing wealth-management platform in the country. PrivateBancorp, with about $19 billion in assets, serves largely middle-market companies, business owners and wealthy families.