Dive Brief:

• Activist investor HoldCo is doubling down on its call for shareholders to reject Fifth Third’s $10.9 billion acquisition of Comerica, asserting last week’s release of more details only highlights the hasty and problematic way the transaction developed.
• In a new presentation issued Monday, Fort Lauderdale, Florida-based HoldCo took aim at the speed with which the year’s biggest bank deal came together. “Only 17 days elapsed between the initial merger discussion and execution of the merger agreement,” the investor said. “This is, by a wide margin, the fastest bank merger timeline since the 2008 global financial crisis.”
• Proxy adviser Institutional Shareholder Services has recommended shareholders vote to approve the merger, although it said disclosures in the initial proxy statement were “limited and did not provide shareholders with sufficient information,” according to its Dec. 19 report. 

Dive Insight:

HoldCo urged Comerica in July to sell itself, accusing the lender of making “disastrous decisions” and having “objectively poor performance.” But once Comerica and Fifth Third struck a deal, the investor faulted the Dallas-based bank for ignoring a bid from another suitor, “Financial Institution A,” reported to be Regions. 

HoldCo sued Fifth Third and Comerica last month in Delaware Court of Chancery, and has called on Comerica to “provide a more complete and transparent chronology of the events leading up to the Fifth Third transaction.” The investor has accused Comerica CEO Curt Farmer of being “focused solely on advancing his own interests” based on the “rushed” way the bank’s proposed deal with Cincinnati-based Fifth Third came together. 

Last week, HoldCo urged Comerica shareholders, when they vote Jan. 6, to reject the deal. 

And after the judge in the Delaware case ordered Comerica to provide additional information, the bank on Dec. 18 released more details on the series of events that led to its agreement with Fifth Third and its talks with Financial Institution A. 

Those details emphasize that fear of a proxy contest at Comerica’s 2026 annual meeting partly spurred the deal’s hasty development, HoldCo argues.  

“The supplemental disclosures demonstrate to us that the timing of the sales process — designed to neutralize a proxy contest — and Mr. Farmer's personal compensation package, rather than shareholder value maximization, were the primary drivers of the transaction,” HoldCo co-founders Vik Ghei and Misha Zaitzeff said in a Monday news release.

The 17-day timeline from initial merger discussion to execution of agreement “more closely resembles some large distressed bank acquisitions that took place during the [Great Financial Crisis],” such as Wells Fargo’s 2008 acquisition of Wachovia, or PNC’s purchase of National City, HoldCo’s presentation said.

Other deals struck this year took 117 days (Huntington’s purchase of Cadence), 67 days (PNC’s acquisition of FirstBank), and 98 days (Pinnacle’s merger with Synovus), HoldCo said. 

The additional information Comerica released last week reveals Farmer engaged in deal discussions “alone and unsupervised” despite his interests being compromised, HoldCo contended. 

Farmer is set to become a vice chair at Fifth Third once the deal is complete, making $8.75 million in annual compensation. He’ll also receive $10 million in cash – half upon completion of the deal, and half a year later for “integration” – and $10.63 million in deferred compensation.

New disclosures “apparently show that Fifth Third understood early on that signaling its intent to generously reward you and your conflicted chairman would strengthen its hand in the negotiations,” HoldCo’s presentation said.

ISS, in its report recommending shareholders vote to approve the acquisition, said HoldCo “deserves credit for its campaign,” since its prodding has drawn out more information. But ISS views the transaction benefiting shareholders, since Fifth Third’s offer seems reasonable based on historical and comparative valuation, and the strategic rationale makes sense.

ISS also noted that no other competing offers emerged, despite Comerica being viewed as an acquisition target since mid-July. 

Truist Securities analyst Brian Finneran said that, too, in a Tuesday note. “If only two banks called in with a bid over three months … it doesn't really imply a feeding frenzy,” he wrote.

Investors have been “surprisingly quiet” about HoldCo’s campaign against the deal, “with most viewing the back and forth more as background noise,” Finneran wrote.  

In reviewing some bank litigation related to corporate directors’ obligations involving a sale, Truist analysts discovered “most have been ruled in favor of the defendant,” Finneran wrote, “so HoldCo would need to buck the trend.”