Comerica Received an Offer Before Fifth Third
A recent filing revealed a relatively swift negotiation process and some short-term benefits for Comerica CEO Curt Farmer.
Background on Acquisition Negotiations
Sometimes banks share the backstory behind acquisition deals, giving readers a glimpse of high-stakes drama. For example, Capital One’s March 2024 disclosure described a six-month pursuit of Discover, involving three declined offers and a seven-week pause in talks.
However, Fifth Third’s account of its proposed merger with Comerica, released Wednesday, showed far less drama.
Earlier Proposal from Another Institution
According to the filing, Fifth Third was not Comerica’s first potential partner. Another entity, named only as Financial Institution A, made a verbal offer for an all-stock transaction in September.
Comerica’s board decided that the terms “were not likely to be more attractive than the consideration that could be offered by another counterparty.”
The board further stated that “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.”
Ongoing Discussions Between CEOs
At the time of the initial offer, Fifth Third had yet to make a formal proposal. Still, Comerica CEO Curt Farmer and Fifth Third CEO Tim Spence had “periodically discussed” financial trends over several years, the filing noted.
Short-Term Benefits for Comerica CEO
The filing also mentioned several short-term perks granted to Comerica CEO Curt Farmer during the negotiations.
Fifth Third’s account “held relatively little of that drama” compared to other bank acquisition stories.
Author's summary: Comerica engaged in brief talks with another firm before determining Fifth Third as the preferred merger partner, reflecting a calculated and less dramatic deal process.