It started in Scarsdale

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It started in Scarsdale

Canadian bank CIBC has built up a good track record in the US since developing an investment-banking strategy in the early 1990s. Now it's consolidating its position south of the 49th parallel by merging with New York firm Oppenheimer. Michelle Celarier reports.

As neighbours in Scarsdale, one of New York City's classier suburbs, Nathan Gantcher, then Oppenheimer president, and Andrew Heyer, a managing director in Canadian Imperial Bank of Commerce Wood Gundy's US high-yield-bond unit, liked to talk shop. And when a proposed sale of Oppenheimer to Bayerische Vereinsbank fell through two years ago, the chats turned to a CIBC-Oppenheimer merger. Glass-Steagall rules prohibiting certain investment and commercial banking combinations meant this was then speculative fantasy. Still, Heyer was struck by the firms' affinity.

"When I sat down and talked with Nate Gancher," Heyer says, "the philosophy behind how they ran Oppenheimer and how we ran Argosy [the high-yield boutique Heyer and two other ex-Drexel bankers created before selling it to CIBC in 1995], was amazingly similar. There was a drive for profitability versus league table rankings and an 'us against them' mentality. The underdog philosophy works well against the big guys."

When Glass-Steagall was relaxed early last year, CIBC Wood Gundy Securities' chief executive officer, Michael Rulle, who heads the US region, asked Heyer to set up a lunch with Gantcher. The two agreed in principle right away, but it took a due-diligence process ­ which uncovered an expensive World Financial Center lease signed by Oppenheimer before the 1987 real-estate collapse ­ to forge a deal by July.

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