CIBC seeks FirstCaribbean valuation of $1.4 billion

Canadian Imperial Bank of Commerce is targeting a valuation of 10 times earnings for a potential stock market listing of its FirstCaribbean business in New York, Reuters reported.

The news agency said the target valuation of $1.4 billion would represent a 30 percent discount to FirstCaribbean’s market valuation of its thinly traded shares on the Barbados stock exchange.

According to earlier reports, the Canadian bank, which holds 91.5 percent of FirstCaribbean, aims to list 20 percent of the business in the first half of this year.

The perceived regulatory risk in the Caribbean and difficult economic conditions in Barbados warranted the discount, Reuters said, citing unnamed sources.

If the target price is not reached, the listing may still fall through, the news article added.

The listing is sought to be inspired by Butterfield Bank’s 2016 initial public offering, which raised about 10 times the bank’s earnings at the time.

Since then, shares in Butterfield have risen by more than 70 percent and the business is now worth more than $2.2 billion, trading at 22 times earnings, Reuters noted.