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CIBC sweetens offer for PrivateBancorp with more cash in $4.9bn deal

Staff Writer |
Canadian Imperial Bank of Commerce (CIBC) increased the cash element of its offer for Chicago-based PrivateBancorp in a final $4.9 billion bid to push the deal through ahead of a May 12 shareholder vote.

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The cash-and-share offer restored the initial valuation of PrivateBancorp from CIBC's previous bid, offsetting a drop in the Canadian bank's shares driven by concerns about its housing market exposure that had eroded the earlier offer's stock-based component.

Pressure on CIBC to increase its offer for a second time intensified on Monday when shareholder advisory firm Institutional Shareholder Services (ISS) recommended PrivateBancorp shareholders vote against it.

ISS cited concerns about Canada's housing market as one factor behind the recommendation.

An earlier shareholder vote was postponed in December after some PrivateBancorp investors had indicated they would reject CIBC's first offer.

CIBC raised its takeover offer by 20 percent to about $4.9 billion in March.

However, CIBC's U.S.-listed shares subsequently fell by nearly 10 percent, reducing the value of the share-based component of that offer.

CIBC said on Thursday it would offer an additional $3 in cash for each PrivateBancorp share, raising the cash element to $27.20 per share. It left the stock component unchanged at 0.4176 of its shares for each of the U.S. bank's shares.

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