11/25/2025
Comerica, Fifth Third Sued by Activist Investor
Banking Dive (11/25/25) Mullen, Caitlin
Just days after threatening legal action against Comerica (CMA), HoldCo Asset Management has sued the regional bank and its proposed buyer, Fifth Third (FITB). The activist investor accused Comerica CEO Curt Farmer of being “focused solely on advancing his own interests” based on the “rushed” way the bank’s proposed $10.9 billion acquisition by Fifth Third came together. The class-action complaint, filed Friday in the Delaware Court of Chancery by HoldCo Opportunities Fund, alleges breaches of fiduciary duty by Comerica and its board members related to the transaction and its “draconian” provisions. It also accuses the bank of leaving out material information from disclosures related to the deal. HoldCo also accused Fifth Third of “aiding-and-abetting” the board in breaching its fiduciary duty. HoldCo prodded Comerica to sell itself to a larger bank in July, accusing the lender of making “disastrous decisions” and having “objectively poor performance.” In October, Fifth Third announced it would acquire Comerica. HoldCo issued a presentation last week that picked apart the proposed deal, threatening to take Comerica to court if it didn’t release more information on how the agreement came together. Comerica rebuffed at least one earlier suitor, Financial Institution A, according to a disclosure. That was Regions Bank, American Banker reported. The deal between Comerica and Fifth Third was “negotiated over an extraordinarily compressed timeline,” HoldCo’s Friday complaint contends. It was driven by Farmer’s “fear of an activist contest” led by HoldCo, “and his fear that no other bidder would keep him on,” the firm alleged. “Fearing for his job, Farmer raced to find a friendly white knight that could provide him with a lucrative post-closing role,” the complaint asserts. Farmer is set to become a Fifth Third vice chair and make nearly $9 million annually, among other perks. Part of the rush, HoldCo claims, was to avoid any proxy contest at Comerica’s annual meeting, to have been held by May 2026. The Fifth Third deal is projected to close in the first quarter of 2026. Although Comerica received an offer from Financial Institution A, the complaint alleges the Dallas bank decided to “nip those negotiations in the bud” and solely focus on Fifth Third. The deal came together hastily and in a way that ensures “no topping bid could disrupt Farmer’s entrenchment plan,” HoldCo attorneys alleged. The merger agreement carries a “gargantuan” termination fee of $500 million and “an absurdly narrow fiduciary-out” that doesn’t let the board scrap the merger for a higher bid, HoldCo said in the complaint. The “draconian” deal protections mean Comerica’s board couldn’t terminate the acquisition for a better proposal until October 2026, even if shareholders don’t vote in favor of the deal, the filing said. HoldCo also alleges the registration statement is “materially misleading and incomplete” and doesn’t provide shareholders with any details that would allow them to compare the deal’s terms with Financial Institution A’s proposed offers. “There is no evidence from the Registration Statement that Comerica ever made a counterproposal or tried to negotiate for a price above the lowest end of the exchange ratio range in Fifth Third’s initial proposal,” the complaint said. “Nor is there any evidence that Comerica made any attempt to re-engage Financial Institution A (to see if it would provide a better proposal) or solicit interest from other potential bidders.” The 17-day span — from the start of potential merger conversations between Farmer and Fifth Third CEO Tim Spence to when an agreement was signed — “is the shortest timeframe of any of the ten largest bank mergers, with the next shortest taking 43 days and the median taking 67 days,” HoldCo contended. “Such negotiations are more reminiscent of distressed bank sales during the 2008 global financial crisis,” the complaint said.
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