TORONTO, Nov. 4 /PRNewswire-FirstCall/ - CIBC (CM: TSX; NYSE) today
announced that it has agreed to sell to Oppenheimer Holdings Inc. (OPY:
NYSE) its U.S. domestic investment banking, equities, leveraged finance and
related debt capital markets businesses. The transaction also includes
CIBC's Israeli investment banking and equities business, and certain parts
of other U.S. capital markets-related businesses located in the UK and
CIBC will retain its other U.S. wholesale businesses, which include
real estate finance, equity and commodity structured products, merchant
banking and oil and gas advisory, as well as the balance of its U.S. debt
capital markets, Asia and U.K businesses.
CIBC will also maintain its corporate lending capability and its
ability to distribute Canadian equities and fixed income products in the
U.S. and international markets on behalf of its Canadian clients.
Under the terms of the agreement, CIBC will receive a deferred payment
on the fifth anniversary of closing based on the performance of
Oppenheimer's combined capital markets business over that five-year period.
CIBC will also receive warrants exercisable for one million Oppenheimer
shares at the end of the five year period.
As part of the transaction, Oppenheimer will borrow $100 million from
CIBC in the form of a subordinated loan. In addition, CIBC will provide a
warehouse facility, initially up to $1.5 billion, to a newly formed
Oppenheimer U.S. entity to finance and hold the syndicated loans for U.S.
middle market companies. Underwriting of loans pursuant to the warehouse
facility will be subject to joint credit approval by Oppenheimer and CIBC.
"This transaction gives CIBC the opportunity to benefit from
Oppenheimer's future success," said Gerry McCaughey, CIBC's President and
Chief Executive Officer. "It will also permit CIBC to redeploy capital over
time to further support the continued growth of our strong and profitable
U.S. and international operations, as well as our core Canadian businesses.
This is in line with our strategic imperative to achieve consistent and
sustainable performance over the long-term."
Albert Lowenthal, Oppenheimer's CEO, said: "We are pleased to once
again be partnering with CIBC and believe that the combination of these
resources will significantly increase Oppenheimer's penetration in capital
markets. The firm is now positioned to service clients with a complete
offering of capital markets services, including M&A advisory, equity
underwriting, high-yield fixed income origination and loan syndication. The
timing of this acquisition will permit us to gain market penetration at a
time that other firms are pulling back. We look forward to working with our
associates both new and old in making this a success."
For the U.S. businesses, the proposed transaction is expected to close
in January 2008, subject to regulatory approvals. A second closing is
anticipated for the overseas operations, including the Israeli
broker-dealer. CIBC does not expect the proposed transaction to have a
material impact on its earnings per share or Tier 1 capital ratio, either
at closing or on an ongoing basis.
CIBC World Markets is the wholesale and corporate banking arm of CIBC,
providing a range of integrated credit and capital markets products,
investment banking, and merchant banking to clients in key financial
markets in North America and around the world. We provide innovative
capital solutions and advisory expertise across a wide range of industries
as well as top-ranked research for our corporate, government and
Oppenheimer Holdings, through its principal subsidiaries, Oppenheimer &
Co. Inc. (a U.S. broker-dealer) and Oppenheimer Asset Management Inc.,
offers a full range of services from 81 offices in 21 states and through
local broker-dealers in 2 foreign jurisdictions. The Company offers trust
and estate services through Oppenheimer Trust Company. Evanston Financial
Corporation is engaged in mortgage brokerage and servicing. In addition,
through its subsidiary, Freedom Investments, Inc. and the BUYandHOLD
division of Freedom, the Company offers online discount brokerage and
dollar-based investing services.
CIBC will hold an analyst/investor/media call to discuss this
announcement on November 5 at 2 p.m. (EST). A live audiocast will be
available in English and French at www.cibc.com, About CIBC. Participants
can also listen to the conference call in English (416-641-6139 in Toronto,
or toll-free 1-866-299-6657 throughout the rest of North America) and
French (514-861-4190 or toll-free 1-877-580-3850 throughout the rest of
North America). A slide presentation will be available at www.cibc.com,
About CIBC, prior to the call. A telephone replay will be available in
English (416-695-5800 or 1-800-408-3053, passcode 3240586 followed by the
number sign) and French (514-861-2272 or 1-800-408-3053, passcode 3241047
followed by the number sign) until midnight (EST) on Monday, November 19,
This news release contains forward-looking statements. These
forward-looking statements include, but are not limited to, statements
about the proposed acquisition by Oppenheimer Holdings Inc. of CIBC's
domestic U.S. investment banking, equity capital markets, leveraged
finance, research and related businesses, as well as operations, financial
condition, strategies and outlook of CIBC. A forward-looking statement is
subject to inherent risks and uncertainties that may be general or
specific. A variety of factors, many of which are beyond CIBC's control
could cause actual results to differ materially from the expectations
expressed in CIBC's forward-looking statements including the possibility
that the proposed transaction does not close when expected or at all and
that CIBC and Oppenheimer Holdings may be required to modify aspects of the
proposed transaction to achieve regulatory approval. Readers should not
place undue reliance on CIBC's forward-looking statements. CIBC does not
undertake to update any forward-looking statement that is contained in this
SOURCE CIBC World Markets