Comerica offered more details on the series of events that led to its agreement to be acquired by Fifth Third, including information on the Dallas-based bank’s talks with Financial Institution A.

The new details, included in a securities filing Thursday, come as the $10.9 billion deal faces scrutiny from activist investors HoldCo Asset Management, which urged Comerica in July to sell itself, but later faulted Comerica for ignoring a bid from another suitor, reported to be Regions. 

HoldCo sued Fifth Third and Comerica last month in Delaware Court of Chancery. A separate shareholder suit, Eric Miller v. Comerica Incorporated et al, was filed in New York Supreme Court. Legal action has cited a lack of transparency around the transaction.

HoldCo has called on Comerica to “provide a more complete and transparent chronology of the events leading up to the Fifth Third transaction,” accusing the bank’s CEO of being “focused solely on advancing his own interests” based on the “rushed” way the bank’s proposed deal with Fifth Third came together. 

The judge in the Delaware case ordered Comerica to provide additional information, according to American Banker. 

Comerica said the allegations in the two lawsuits are “without merit” and “no supplemental disclosures are required under applicable laws.” 

However, “to avoid the risk of the Demand Letters and the Stockholder Actions delaying the Mergers and minimize the potential expense associated therewith, and without admitting any liability or wrongdoing, Comerica is voluntarily making certain disclosures” that supplement its earlier proxy.

Thursday’s filing made a number of additions or clarifications, including that Comerica won’t pay the $500 million deal termination fee if its shareholders don’t approve the deal in a vote Jan. 6. 

The filing also notes that if Comerica or Fifth Third shareholders don’t approve the deal, the banks will use “reasonable best efforts” to renegotiate merger terms. 

That dovetails with a narrative HoldCo pushed in a presentation this week – namely, that Fifth Third “is contractually obligated to try to re-cut and resubmit the deal” if shareholders reject it.

The deal has, however, already earned approval from the Office of the Comptroller of the Currency. The Federal Reserve and the Texas Department of Banking have yet to sign off. 

At a Sept. 11 board meeting, which included Comerica’s senior management, the bank’s financial adviser reviewed financial metrics of potential mergers with four parties, including Financial Institution A and Fifth Third. 

Other than Financial Institution A’s preliminary expression of interest, “no party other than Fifth Third provided a verbal or written indication of interest in an acquisition of, or strategic combination with, Comerica during this period or at any time prior to or following the announcement of the merger agreement,” the filing said. 

The board advised Comerica CEO Curt Farmer to contact Financial Institution A, to assess its interest and invite a merger proposal. On Sept. 16, that CEO confirmed his bank’s interest in making an offer and verbally proposed to Farmer an all-stock transaction valuing Comerica’s common stock between $78 and $82 per share. 

The unnamed CEO said Financial Institution A wouldn’t take part in an auction process and “that it would potentially be interested in contemplating entering into a transaction in the first quarter of 2026,” the filing said. The CEO also raised the possibility of “a transitional post-closing employment role” for Farmer “for a limited period of time.”

Farmer indicated the proposal was unlikely to appeal to Comerica’s board. 

The next day, Financial Institution A’s CEO called Farmer to share a revised merger proposal for a transaction that could potentially be entered into in the fourth quarter and at a higher price, between $80 and $84 per share, if Comerica would agree to engage exclusively with that bank.

On Sept. 18, Comerica’s board discussed Financial Institution A, including “the level of due diligence Financial Institution A was likely to require,” and its “readiness to transact.” The board “discussed in detail” potential partners, and concluded Financial Institution A’s preliminary proposals were not likely to be more attractive than what could be offered by another bank like Fifth Third, “and were not sufficient to grant the exclusivity requested by Financial Institution A.”

That same day, Farmer called Fifth Third CEO Tim Spence, and as the two engaged in discussions about a potential deal, Spence raised the possibility that Farmer would join the board or have a transitional post-closing employment role at Fifth Third for a limited period of time, according to the filing.

Farmer told Financial Institution A’s CEO on Sept. 20 that Comerica’s board was uninterested in working exclusively with the lender based on its latest proposal, but it was welcome to issue another proposal. “Financial Institution A did not thereafter make a further proposal,” according to Thursday’s filing. 

On Sept. 21, Spence told Farmer a potential proposal he and Fifth Third’s board were considering valued Comerica’s stock between $84 and $87 per share based on Fifth Third’s stock price at the time. Farmer indicated to Spence “that he expected the offer price would need to be increased in order for the Comerica board of directors to be supportive,” the filing said.

Fifth Third then suggested Comerica shareholders receive 1.8663 to 1.9097 shares of Fifth Third common stock for each share of Comerica common stock, implying a transaction price per share of $86 to $88. The Cincinnati bank also conveyed that Farmer would get a vice chair role and then a board seat; three Comerica board members would join Fifth Third’s board; employment commitments would be made in Dallas and Detroit and Fifth Third could complete due diligence in two to three weeks, with an announcement made on or before the bank’s third-quarter earnings call in October. 

All of this appealed to the Comerica board when it met Sept. 24, and the board gave senior management the OK to continue discussions with Fifth Third. 

“Mr. Farmer noted his intention to seek to maximize the valuation level within the range proposed by Fifth Third, noting, however, that Fifth Third’s willingness to transact and their ultimate price level would likely be dependent upon the results of their due diligence,” the filing said. He “requested that Mr. Spence agree to an exchange ratio at the top of Fifth Third’s communicated range.”

Spence wanted Comerica to enter into an exclusivity agreement with Fifth Third, which Farmer said Comerica was not willing to do. Also, Fifth Third initially proposed a $600 million termination fee, which was negotiated down to $500 million.

Farmer checked in with Financial Institution A’s CEO again on Sept. 27 to let him know that Comerica’s board continued to assess strategic alternatives, but that bank didn’t make another offer, the filing said.

On Sept. 30, Spence informed Farmer of Fifth Third’s final proposed exchange ratio of 1.8663 Fifth Third shares per Comerica share “based on the results of Fifth Third’s due diligence.” 

That review indicated “Comerica’s projected profitability and the incremental investments required to improve the growth trajectory did not provide the capacity for Fifth Third to increase the consideration level it could offer and achieve sufficient earnings accretion for the combined company,” the filing said. 

Spence also said “tangible book value per share dilution was not the binding constraint for Fifth Third in the transaction, but instead it was earnings accretion,” hence the offer at the lower end of the range.