N.T. Butterfield Acquires CIBC Caribbean Bank for $1.79B

N.T. Butterfield (NTB) has entered into a definitive agreement to acquire CIBC's 91.7% interest in CIBC Caribbean Bank. The total consideration to be paid for CIBC Caribbean will be comprised of $1.09B in cash and $703M in Butterfield shares valued by reference to Butterfield's 10-day NYSE VWAP of $55.66 as of May 27, for an aggregate purchase price of $1.79B, or $1.14 per CIBC Caribbean share. Under the terms of the agreement, which have been unanimously approved by the board of directors of Butterfield, Butterfield will acquire CIBC Investments, the holding company for CIBC's 91.7% interest in CIBC Caribbean. Butterfield will subsequently commence a mandatory take-over bid for the remaining 8.3% of total outstanding shares of CIBC Caribbean held by minority shareholders, with the objective of acquiring full ownership of CIBC Caribbean, subject to applicable law and regulatory requirements. CIBC Caribbean's minority shareholders will be offered equivalent economic terms as CIBC, and will also have the option to elect to receive up to 100% of their consideration in Butterfield shares, providing them with the opportunity to maintain the entirety of their investment in the combined organization, should they choose to do so. Assuming minority shareholders elect the same mix of cash and shares as CIBC, following completion of the take-over bid they would collectively own approximately 2% of Butterfield. In connection with the transaction, Butterfield has obtained commitments for $700M of Tier 2 capital-qualifying subordinated debt financing expected to be raised prior to closing. Following completion of the transaction, the combined company is expected to maintain capital levels significantly above applicable regulatory thresholds on a consolidated basis, with a pro forma CET1 ratio above 12%, and total capital above 19% at closing. The transaction is expected to close in the first half of 2027, subject to receipt of Butterfield shareholder and regulatory approvals and the satisfaction of customary closing conditions. Following the transaction, Butterfield's ordinary shares will continue to be listed on the New York Stock Exchange and the Bermuda Stock Exchange, and Butterfield intends to undertake additional secondary share listings on the Barbados Stock Exchange, the Bahamas International Securities Exchange and the Trinidad & Tobago Stock Exchange, subject to local listing and regulatory requirements. Following completion of the transaction, CIBC will own an approximately 22% stake in the combined entity. Under the terms of Butterfield and CIBC's shareholder agreement, CIBC will then initially have the right to appoint two directors to Butterfield's board. The shareholder agreement will also provide for certain lockup restrictions with respect to CIBC's stake in Butterfield, and include customary standstill obligations and registration rights. The Bermuda Monetary Authority will continue to serve as the consolidated regulatory supervisor of Butterfield across all of its locations. Butterfield will also collaborate with all relevant jurisdictional authorities.