CIBC Announces Sale of Part of CIBC World Markets U.S. Business

Nov 04, 2007, 01:00 ET from CIBC World Markets

    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
 institutional clients.
     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, 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,
 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
 news release.

SOURCE CIBC World Markets