News
HoldCo Asset Management has filed a lawsuit against Comerica and its prospective buyer, Fifth Third Bancorp, alleging that the $10.9 billion merger agreement was rushed, conflicted, and designed to benefit Comerica’s CEO rather than shareholders. The legal challenge comes just days after HoldCo threatened litigation unless the bank disclosed more details about how the deal was formed.
In its class-action complaint submitted to the Delaware Court of Chancery, HoldCo argues that Comerica CEO Curt Farmer prioritized his own job security over shareholder value. The activist investor says the transaction was pushed forward on an “extraordinarily compressed timeline,” allegedly to secure Farmer a senior role at Fifth Third — a position that includes nearly $9 million in annual compensation.
HoldCo asserts that Farmer rushed to finalize a deal before a potential proxy fight and avoided competitive bidding that could have generated a higher offer. According to the filing, the entire negotiation process lasted only 17 days — the shortest timeline among the 10 largest U.S. bank mergers in recent history.
Documents included in the registration statement indicate Comerica received an earlier offer from another suitor, identified as “Financial Institution A,” which American Banker later reported to be Regions Bank. HoldCo alleges Comerica quickly dismissed that proposal and did not attempt to negotiate for better terms or solicit additional bids.
The investor contends the merger agreement includes a $500 million termination fee and a narrow “fiduciary-out” clause that prevents the board from accepting a superior proposal until late 2026 — even if shareholders vote against the deal. These restrictions, HoldCo argues, effectively block competitive offers and entrench current leadership.
Moreover, HoldCo claims that Comerica’s disclosures are incomplete and misleading, preventing shareholders from comparing Fifth Third’s terms with any alternative offers.
Comerica and Fifth Third strongly rejected the claims in court filings. Comerica’s attorneys said the lawsuit contradicts HoldCo’s own earlier demands for the bank to sell itself and characterized the suit as “gamesmanship.” Fifth Third’s legal team called the aiding-and-abetting accusation “facially meritless.”
Both banks argue the activist investor is pursuing its own agenda rather than acting in the best interest of shareholders. They also pointed out that HoldCo raised no indication of imminent litigation during recent discussions with Comerica’s counsel — before filing the suit just ahead of the Thanksgiving holiday.
The shareholder vote on the merger is tentatively scheduled for January 6. A hearing on HoldCo’s motion to expedite the case was set for Tuesday. With a high-profile legal challenge now underway, the future of the merger — one of the most closely watched regional bank transactions of 2026 — may hinge on whether the court finds evidence of breached fiduciary duties or inadequate disclosures.
This lawsuit highlights a growing trend: activist investors are playing an increasingly influential role in shaping bank mergers, governance decisions, and regional consolidation strategy. As shareholder scrutiny intensifies, financial institutions will need stronger transparency, more robust deal processes, and a clear demonstration of value creation to withstand legal pressure and market skepticism.
Or Sushan
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December 31, 2025
Or Sushan
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December 31, 2025
Or Sushan
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December 31, 2025
