Comerica Received a Deal Offer Before Fifth Third
A Wednesday filing revealed a relatively swift negotiation process and some short-term benefits for Comerica CEO Curt Farmer.
Background of the Acquisition Talks
When banks disclose acquisition agreements, they sometimes share dramatic stories. For instance, in March 2024, Capital One detailed a six-month pursuit of Discover, including three declined offers and a seven-week pause in talks.
The Fifth Third and Comerica Negotiation
The recent account of Fifth Third's proposal to merge with Comerica, published Wednesday, showed less drama. The Cincinnati bank was not Comerica's first potential partner.
- In September, the CEO of another company, referred to as Financial Institution A, verbally proposed a possible all-stock transaction with Comerica.
- Comerica's board found these terms unlikely to be better than what another suitor could offer.
- The board decided that Fifth Third would be the optimal merger partner if it presented an offer that fairly valued Comerica.
The filing states, “Fifth Third would be the optimal merger counterparty to a business combination transaction if Fifth Third were to make a proposal which appropriately valued Comerica.”
At the time, Fifth Third had not made a formal offer, but Comerica CEO Curt Farmer and Fifth Third CEO Tim Spence had "periodically discussed" financial industry trends over the years.
Summary
The filing highlights that Comerica considered multiple suitors but found Fifth Third to be the best potential partner, based on valuations and ongoing CEO dialogues.
“The CEO of another firm... verbally proposed a potential all-stock transaction,” the filing noted, “but the board determined those terms were not likely to be more attractive than offers from others.”
Author's summary: Comerica's board prioritized an optimal deal with Fifth Third after evaluating an earlier offer, reflecting strategic discussions between their CEOs over time.