Activist Investor HoldCo Challenges Fifth Third’s Acquisition of Comerica
HoldCo, an activist investor, is intensifying its efforts to persuade shareholders to oppose Fifth Third’s $10.9 billion purchase of Comerica. The recent release of additional details regarding the deal has only served to highlight the rushed and problematic nature of the transaction.
Timeline Concerns
- HoldCo, based in Fort Lauderdale, Florida, criticized the speed at which the merger between Comerica and Fifth Third was finalized. The investor pointed out that only 17 days passed from the initial merger discussions to the execution of the merger agreement, making it the fastest bank merger timeline since the 2008 global financial crisis.
- Institutional Shareholder Services (ISS) has recommended shareholders to approve the merger, despite acknowledging that the initial proxy statement lacked sufficient information.
HoldCo’s Stance
In July, HoldCo urged Comerica to consider selling itself, citing poor performance and questionable decisions. However, once the deal with Fifth Third was announced, HoldCo criticized Comerica for overlooking a bid from another potential buyer, referred to as “Financial Institution A.”
HoldCo filed a lawsuit against Fifth Third and Comerica in Delaware Court of Chancery, alleging that the deal was hastily put together, with CEO Curt Farmer being accused of prioritizing personal interests over shareholder value maximization.
HoldCo has called upon Comerica to provide a more transparent account of the events leading up to the agreement with Fifth Third and has urged shareholders to reject the deal.
Additional information released by Comerica revealed that the fear of a proxy contest at the 2026 annual meeting played a significant role in expediting the deal’s development, according to HoldCo.
The investor’s presentation highlighted the quick timeline of the deal and raised concerns about Farmer’s involvement in discussions without adequate oversight, given his potential conflicts of interest.
Financial Details
Upon completion of the acquisition, Farmer is set to become a vice chair at Fifth Third, with an annual compensation of $8.75 million. He will also receive additional payments totaling $20.63 million.
ISS, while acknowledging HoldCo’s efforts to bring more information to light, has recommended shareholders to approve the acquisition, citing historical valuation and strategic rationale.
Market Response
Analysts have noted the lack of competing offers for Comerica, despite its status as an acquisition target since mid-July. Investors have shown relatively muted reactions to HoldCo’s campaign against the deal.
Truist Securities analyst Brian Finneran highlighted the legal precedents favoring corporate directors in similar cases, suggesting that HoldCo faces an uphill battle in challenging the deal.
Overall, the market response to HoldCo’s objections has been subdued, with most observers viewing the situation as background noise.
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