Business
Comerica has disclosed new details surrounding the negotiations that led to its proposed $10.9 billion acquisition by Fifth Third Bancorp, responding to mounting legal pressure from activist investors and shareholders questioning the transparency of the process. The additional information was released in a securities filing on Thursday, following court intervention in Delaware and ongoing litigation in New York.
The disclosures shed light on competing approaches, internal board deliberations, and interactions with an unnamed suitor referred to as “Financial Institution A,” as Comerica moved toward its agreement with Fifth Third.
The deal has drawn sharp criticism from HoldCo Asset Management, an activist investor that previously urged Comerica to explore a sale but now argues the bank failed to fully engage with alternative bidders. HoldCo alleges the transaction with Fifth Third was rushed and insufficiently disclosed, claims Comerica strongly disputes.
While Comerica maintains that the allegations are “without merit” and that no supplemental disclosures were legally required, it acknowledged that the court-ordered environment and shareholder demands created the risk of delays. To avoid prolonging the merger process, the bank voluntarily expanded its earlier proxy disclosures without admitting wrongdoing.
Importantly, Comerica clarified that it would not be required to pay the $500 million termination fee if shareholders reject the deal in the January 6 vote. The filing also confirmed that both banks would be expected to use “reasonable best efforts” to renegotiate terms if shareholder approval is not obtained.
According to the filing, Comerica’s board reviewed potential merger scenarios with four parties in September, including Fifth Third and Financial Institution A. Aside from Fifth Third, Financial Institution A was the only party to express preliminary interest, proposing an all-stock transaction valuing Comerica shares initially between $78 and $82.
The unnamed bank later raised its indicative valuation to as much as $84 per share but demanded exclusivity and suggested a transaction timeline extending into 2026. Comerica’s board declined to grant exclusivity, citing concerns over execution readiness, due diligence requirements, and overall deal certainty.
After further discussions, Financial Institution A failed to submit a binding proposal, effectively removing itself from consideration.
Fifth Third’s proposal ultimately proved more compelling to Comerica’s board. Its offer implied a higher valuation range of roughly $86 to $88 per share, based on an exchange of Fifth Third stock. The Cincinnati-based bank also demonstrated faster execution, completing due diligence within weeks and offering continuity for Comerica’s management, employees, and regional operations.
Comerica CEO Curt Farmer was offered a transitional leadership role and eventual board seat, though the filing emphasizes that valuation, earnings accretion, and strategic fit were the decisive factors. Fifth Third later finalized its offer at the lower end of its proposed range after concluding that earnings accretion, not tangible book value dilution, constrained the deal economics.
The acquisition has already received approval from the Office of the Comptroller of the Currency, though sign-off from the Federal Reserve and the Texas Department of Banking remains pending. As litigation continues and shareholders prepare to vote, the deal remains intact but under close scrutiny.
For investors, the episode underscores the growing influence of activist shareholders in bank M&A and the heightened expectations for transparency in large transactions. How courts and shareholders ultimately respond could shape not only Comerica’s future, but also how bank boards manage competitive processes in an increasingly contentious regulatory and legal environment.
Or Sushan
-
December 19, 2025
Or Sushan
-
December 19, 2025
Or Sushan
-
December 19, 2025
Or Sushan
-
December 17, 2025
