Activists Call Fifth Third’s Deal for Comerica ‘Flawed’

Core Viewpoint - HoldCo Asset Management LP is challenging Comerica Inc. regarding its acquisition by Fifth Third Bancorp, labeling the sale process as "flawed" and demanding more transparency ahead of a shareholder vote scheduled for early January [1][2]. Group 1: Acquisition Details - Fifth Third Bancorp announced an all-stock acquisition of Comerica valued at $10.9 billion on October 6, following pressure from Comerica investors due to its underperformance in loan growth and cost management [3]. - The acquisition is seen as a strategic move for Fifth Third to accelerate its expansion efforts after years of building branches in the Southeast [3]. Group 2: Investor Concerns - HoldCo claims that Comerica did not conduct a competitive sale process and instead favored Fifth Third as a preferred bidder, which may not maximize shareholder value [2][4]. - The activist investor is requesting additional disclosures about the sale process, including details about another unidentified bidder that proposed a merger to Comerica's CEO in September [4][6]. Group 3: Negotiation and Valuation - HoldCo criticized Comerica for accepting Fifth Third's offer, which was at the low end of the valuation range, suggesting inadequate negotiation efforts [2][6]. - The initial proposal from Fifth Third indicated that Comerica shareholders would receive at least 1.8663 shares of Fifth Third common stock for each share of Comerica, raising questions about the negotiation process [6]. Group 4: Potential Legal Action - If Comerica does not provide the requested disclosures, HoldCo is considering legal action in the Delaware Court of Chancery to obtain this information and may also sue for breaching fiduciary duty related to the sale process [7]. - HoldCo currently holds approximately 2 million shares of Comerica, representing about 1.6% of the outstanding shares, and had previously urged the company to pursue an immediate sale [8].