* CEO says bank taking "patient" approach
* CFO says bank remains focused on deal
* Could step up stock buybacks if deal doesn't materialize
* Existing CIBC offer expires at end June
* Previous shareholder vote on deal was delayed in December
(Adds comment by shareholders, chief financial officer)
By Matt Scuffham and Fergal Smith
TORONTO, Feb 23 Canadian Imperial Bank of
Commerce said on Thursday it would be "disciplined" in
assessing whether to raise its C$3.8 billion ($2.9 billion)
offer for Chicago-based PrivateBancorp and could buy back shares
if the deal collapses.
The bank announced what would be its biggest acquisition in
June last year, but the plan has been in doubt since
PrivateBancorp postponed a shareholder vote to approve it in
December after some investors said they would reject the offer.
CIBC is weighing its options ahead of a deadline in June and
could decide to raise its offer or walk away.
Speaking after the bank posted better-than-expected
quarterly results, CIBC Chief Executive Victor
Dodig said he believed the deal was still in the best interest
of CIBC and PrivateBancorp shareholders.
"They're a good bank," he said. "We've been working with
them for a long, long time, we've got good integration plans
under way, but we will be disciplined and we will be patient
when it comes to price."
He added: "We may have to be more active in terms of buying
back stock over time if we're not able to consummate that deal."
Since Donald Trump's victory in the Nov. 8 U.S. presidential
election, some PrivateBancorp shareholders had argued that the
prospect of higher interest rates, lighter banking regulation
and a lower corporate tax rate in the United States meant the
business was worth more than when the offer was first made.
Banking sources say CIBC executives don't want to be seen to
be overpaying for PrivateBancorp at a time when valuations for
U.S. regional banks are soaring but are also reluctant to walk
away from a deal they had been working on for months.
Shares in PrivateBancorp have risen by nearly 30 percent
since the beginning of November and close to 60 percent since
the day before CIBC made its offer on June 29.
On Thursday, PrivateBancorp shares were down 2.1 percent,
and CIBC shares were up 0.8 percent in midday trade.
"I think they (CIBC) are just standing their ground, so
kudos for them for having a valuation in mind that they are
willing to pay," said Barry Schwartz, portfolio manager at
Baskin Financial Services, who holds some CIBC shares.
"There are 8,000 regional banks in the U.S.; there are a lot
of other fish in the sea and other opportunities if it doesn't
work out for them," he added.
Chief Financial Officer Kevin Glass told Reuters in an
interview that although CIBC could pursue alternative options in
the United States, the bank remained keen on PrivateBancorp.
"I think there are always other deals but we’ve spent a lot
of time with PrivateBanc," he said. "We think it would be a very
good fit and so we’ll stay focused on that in the short term."
Manash Goswami, portfolio manager at First Asset Investment
Management, another shareholder, said he believed CIBC was keen
to make the PrivateBancorp deal work.
"We're still under the assumption that they will pursue it,"
($1 = 1.3155 Canadian dollars)
(Reporting by Matt Scuffham and Fergal Smith, editing by Jane
Merriman, Jason Neely and W Simon)