Shareholder approval sought for share issuance in bank deal
Butterfield Bank is seeking shareholder approval to issue almost 12 million new shares as part of the almost $1.8 billion purchase of a major Caribbean bank.
Butterfield announced in May that it would be purchasing Barbados-headquartered CIBC Caribbean, the subsidiary of the Canadian Imperial Bank of Commerce.
Butterfield is buying CIBC’s 91.7 per cent holding in the Caribbean bank. As part of the deal, Butterfield will acquire CIBC Investments (Cayman), which holds CIBC’s interest in CIBC Caribbean.
In a letter to shareholders tonight, Butterfield said New York Stock Exchange and Bermuda Stock Exchange rules require shareholder approval to issue new shares.
If approved, Butterfield will issue approximately 11.58 million new Butterfield shares to CIBC and a smaller number to CIBC Caribbean and CIBC Bahamas minority shareholders depending on their elections. Minority shareholders will be offered the ability to elect to receive up to 100 per cent share consideration.
Existing Butterfield shareholders are expected to own approximately 72.3 per cent to 75.2 per cent of the enlarged group, depending on the mix of consideration elected by CIBC Caribbean and CIBC Bahamas minority shareholders.
“Opportunities like this one do not come along often,” said Michael Collins, Butterfield chairman and CEO.
“CIBC Caribbean is a business we know well. Our relationship with CIBC goes back to 2010, when they supported the recapitalisation of Butterfield. This transaction is a natural evolution of that partnership.”
Butterfield is combining with a business that has about 2,700 employees, 42 branches across ten Caribbean jurisdictions and longstanding client relationships.
“The businesses are complementary, with a compelling business case for the combined entity that scales Butterfield’s successful long-term strategy, profitability and culture,” Mr Collins said.
The purchase price of $1.794 billion represents 1.06 times CIBC Caribbean’s tangible book value, approximately 8.6 times 2025 adjusted earnings.
It will be paid approximately 61 per cent in cash and 39 per cent in newly issued Butterfield shares.
Mr Collins noted: “Together with CIBC Caribbean, we will hold the No 1 banking position in the Cayman Islands, Bermuda, Barbados, the Bahamas and Turks & Caicos, with approximately $29 billion in total assets and more than $25 billion in deposits across 19 jurisdictions.
“Scale matters in our industry, supporting investment in technology, talent and client service.”
• For more on Butterfield’s letter to shareholders, see Related Media
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