The amended merger agreement values PrivateBancorp at $6.6-billion, or $60.92 (U.S.) per share.
CIBC shares dropped 2.7 percent to C$114.06 on Thursday, while PrivateBancorp shares jumped 5.5 percent to $59.27. PrivateBancorp, with about $20 billion in assets, serves largely middle-market companies, business owners and wealthy families.
Zechner says the CIBC bid will likely be sufficient to close the deal and doubts a competing bidder will emerge for PrivateBancorp.
In the view of one well-placed market participant a major clue that the plan was on track came about six weeks back when CIBC announced a normal course issuer bid. "Investors are concerned that they might be overpaying", said Colin Cieszynski, chief market strategist at CMC Markets Canada. "What happens if you pay up for this and then the U.S".
The shares of many US banking firms have been rising on speculation that President Donald Trump and a Republican Congress will lower taxes and reduce regulation of banks. CIBC said it is interested in extending its business in the U.S. The stock has benefited from upbeat sentiment as investors counted on potential tax cuts, an easing in financial regulations and higher interest rates to boost the US banking sector.
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The new offer substantially increases the chances the deal will get done, noted BNN Commentator Andrew McCreath.
The offer values the US financial services company at about C$6.6 billion, as CIBC raises both the number of shares it is offering and the amount of cash.
Nearly four months back, the US target postponed a special shareholders meeting called to vote on the cash and paper offer from CIBC.
Thrivent Financial for Lutherans boosted its stake in shares of PrivateBancorp Inc (NASDAQ:PVTB) by 9.6% during the fourth quarter, Holdings Channel reports.
PrivateBancorp's shareholders need to approve the deal with a vote scheduled in the middle of May.