Cdn Impl Up On Potential Gain From Global Crossing Stake
By Ben Dummett
TORONTO (Dow Jones)--Canadian Imperial Bank of Commerce's (BCM) stock is
sharply outperforming Toronto's banking sub-index, on the potential gains the
bank stands to make from its merchant banking investment in Global Crossing
Ltd. (GBLX).
Canadian Imperial would earn about C$9.80 a share, or a total of about C$688
million, in after tax-profit from selling its stake in Global Crossing, based
on Global Crossing's closing price Monday of 56 9/16 on Nasdaq, calculates Roy
Palmer, a bank analyst at TD Securities, the brokerage operation of Toronto
Dominion Bank (TD).
And the holding is worth even more based on Global Crossing stock price
Tuesday of 59, which is up 2 7/16 on the day, Palmer added.
U.S.-based Global Crossing operates fiber-optic networks for Internet and
telecom services.
The potential gain for Canadian Imperial represents "an enormous increment
in the bank's net worth" that could be used to buy back shares, boost the
bank's reserves or finance growth, Palmer said.
Canadian Imperial can't sell any of its Global Crossing stake until the
fourth quarter, but then it's expected to reduce its holding over a period of
time, the analyst said.
In Toronto, Canadian Imperial is trading up 1.20 at 39.45, compared with a
0.37% gain in Toronto's banking sub-index.
(MORE) DOW JONES NEWS 03-16-99
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