Fifth Third-Comerica deal wins more support amid lawsuit

Core Insights - Fifth Third Bancorp's $10.9 billion acquisition of Comerica has received a favorable recommendation from Institutional Shareholder Services (ISS), indicating that the offer is reasonable based on historical and comparative valuation [2][3] - The strategic rationale for the acquisition is considered logical, with expectations of significant cost savings and the combined company projected to have $288 billion in assets [5][10] - The stock prices of both Fifth Third and Comerica have increased since the announcement of the deal, with Comerica's price rising approximately 25% and Fifth Third's by about 8% [5][10] Legal and Regulatory Context - An ongoing legal battle exists between HoldCo Asset Management and the banks, with HoldCo criticizing the merger process and alleging insufficient disclosure of pertinent information [7][9] - The banks have amended their filing with the SEC to include additional information requested by HoldCo, which may address some of the concerns raised by shareholders [8][9] - The deal awaits approval from the Texas Department of Banking, the Federal Reserve Board, and shareholders, with a vote scheduled for January 6 [14][17] Activist Investor Influence - HoldCo Asset Management has played a significant role in influencing Comerica's sale and pushing for additional disclosures, which ISS acknowledged in its analysis [6][9] - The activist investor has expressed intentions to vote against the deal and has raised questions about the speed and process of the acquisition [11][12] - The updated disclosures from the banks have been viewed as evidence that the board prioritized speed over value, according to HoldCo [11] Market Reactions and Future Outlook - Analysts have generally praised the financial and strategic aspects of the deal, indicating a positive outlook for its completion [17] - Fifth Third's CEO has expressed confidence in obtaining regulatory approvals and has described discussions with regulators as constructive [16] - An anonymous group opposing the deal has filed letters with the Federal Reserve, requesting transparency regarding the additional disclosures and a public hearing on the transaction [18][19]